Stablecoin USD Coin has seen its market value jump by $3.4 billion caused by investors withdrawing as much as $8.5 billion in USDT following volatility in the sector.
The crash of stablecoin TerraUSD has made traders turn to other cryptocurrency assets keeping their peg to the USD at a one-to-one ratio. The movement has also benefited other stablecoins, with Binance USD’s value jumping by $1.2 billion.
Tether’s USDT stablecoin temporarily lost its peg, dropping to about $0.95 on May 12, causing many liquidations.
The instability in the stablecoin increased the market value of USDC, which has been in a downward direction since February.
USDC is a collateralized stablecoin that relies on dollar reserves to support its value. The model differs from the algorithmic stablecoins like TerraUSD, which uses on-chain algorithms to maintain the peg.
Circle’s CEO, Jeremy Allaire, says that the company has witnessed an influx in demand for USDC since the collapse of TerraUSD.