Analysis of Stablecoin Market Dynamics After USDC Crisis

Recently, the US dollar stablecoin USDC faced a liquidity crisis, causing market fluctuations. Data shows that USDC once dropped to 0.8788 USD, with a daily decline of over 12%. This de-pegging event not only affected USDC itself but also impacted other stablecoins that used it as collateral. Although the crisis has eased, as one of the previously most trusted stablecoins, USDC's de-pegging has brought many changes and reflections to the market.

By analyzing the basic situation and market data of stablecoins (from March 11 to 18), we have identified the following key trends:

1. The market capitalization of fiat stablecoins has generally increased, while the market capitalization of crypto-asset-backed stablecoins has fallen across the board. This indicates that the market's confidence in fiat stablecoins remains relatively strong, whereas crypto-asset-backed stablecoins are facing greater negative impacts.

2. The market capitalization of USDC is currently about 47% of USDT, which is less than half. TUSD has seen the most significant growth in market capitalization, exceeding 54%. The market capitalizations of other stablecoins such as USDT, DAI, LUSD, USDP, GUSD, FLEXUSD, and USDD have also increased.

3. The stock of stablecoins in exchanges is rapidly flowing out, approximately USD 21.461 billion on March 18, a decrease of 11.02% compared to March 11.

4. The total locked value of major stablecoins in Uniswap v3, Curve, and AAVE v2 decreased from $3.464 billion to $3.297 billion, a drop of approximately 4.83%.

5. On March 11, the total trading volume of stablecoin trading pairs on decentralized exchanges surged to $23.17 billion, far exceeding the usual levels. USDC, USDT, and DAI became the main liquidity pathways for stablecoins in DeFi during the crisis.

Market Capitalization Change: TUSD Surges, USDC Falters

The decoupling of USDC has led to significant fluctuations in the market value of various stablecoins. On March 11, compared to March 10, most major stablecoins saw a decline in market value, with USDC dropping by 2.5%. SUSD, DOLA, MAI, and USTC experienced even larger declines, ranging from 2.8% to 5.0%. However, some stablecoins did see an increase in market value, with USDP having the largest increase, exceeding 11%.

As of March 18, the market value change trend of some stablecoins continues. TUSD performed the most prominently, with a market value increase of over 54%, and USDT also rose by more than 6%. Meanwhile, USDC, BUSD, MIM, SUSD, DOLA, USDX, and ALUSD continued to decline, with MIM experiencing the largest drop of over 17%, and USDC falling by more than 14%.

From the perspective of the average market value changes of different types of stablecoins, fiat stablecoins have performed relatively steadily, showing an upward trend in average market value for the six fiat stablecoins on both the 11th and the 18th. In contrast, the average market value of the nine crypto-asset-based stablecoins has continued to decline. Algorithmic stablecoins have shown some resilience; although the average market value fell by 1.26% on the 11th, it rebounded by 2.82% on the 18th.

Stablecoin Landscape: USDT Dominates, Fiat-backed Stablecoins Remain Mainstream

There are currently over 100 stablecoins in the market, with a total market capitalization of approximately 133.388 billion USD. USDT remains the market leader, with a market capitalization of about 76.74 billion USD, followed by USDC, with a market capitalization of approximately 36.03 billion USD. Together, they account for 85% of the total market capitalization of stablecoins.

Among the major stablecoins, in addition to USDT and USDC, those with a market capitalization exceeding 1 billion USD include BUSD, DAI, TUSD, and FRAX. In terms of type, fiat-backed stablecoins have the highest market capitalization, but the most numerous among high market cap stablecoins are those backed by crypto assets.

It is worth noting that besides Ethereum, there are also several public chains with large market cap stablecoins. For example, Tron has become the main chain for USDT, and it is also the main chain for TUSD, USDD, and USDJ. Chains such as Optimism, Polygon, and Kava also have stablecoins with large market caps.

Changes in Exchange Inventory and Purchasing Power

On March 18, the exchange's stablecoin holdings were approximately $21.461 billion, a decrease of 11.02% compared to the 11th, with a relatively fast outflow rate. However, on the 11th, the exchange's stablecoin holdings increased by 3.49% compared to the 10th, possibly related to users exchanging for stablecoins to hedge against risks.

The Stablecoin Supply Ratio (SSR) indicates that as of March 18, the SSR is approximately 4, an increase of about 30% compared to the 11th. This is related to the recent rebound in Bitcoin prices, while the market value of stablecoins has declined overall due to the crisis, leading to an increase in SSR and a decrease in actual purchasing power.

Stablecoin Liquidity in DeFi

The total locked value of major stablecoins in Uniswap v3, Curve, and AAVE v2 decreased from $3.464 billion on the 11th to $3.297 billion on the 18th, a drop of approximately 4.83%. Among them, the locked value of USDT in these three protocols has significantly increased, while the locked value of USDC in Uniswap v3 and Curve has noticeably declined.

On March 11, the total trading volume of stablecoin trading pairs on decentralized exchanges reached $23.17 billion, far exceeding normal levels. The trading between USDC, USDT, and DAI constituted the main liquidity path for stablecoins in DeFi during the crisis.

In the lending market, the deposit and borrowing rates of USDC and DAI show a "V" shaped trend, while USDT, TUSD, GUSD, LUSD, and SUSD show a "Λ" shaped trend. Currently, the deposit and borrowing rates in the lending market have returned to the levels at the beginning of the month.

Overall, this crisis highlights the importance of stablecoins as a bridge between the crypto world and fiat currencies, while also exposing their potential vulnerabilities. Although regulated USD stablecoins may become a weak link in the system, their ability to resist risks is relatively strong, which is why users maintain confidence in regulated fiat stablecoins.