Saturday, June 10, 2023
No Result
View All Result
SUBSCRIBE
eNaira Online News
  • Home
  • eNaira
  • Capital Market
  • Business
  • Finance
  • Banking
  • PF
  • Companies
  • Crypto
  • Real Estates
  • Opinion
  • Home
  • eNaira
  • Capital Market
  • Business
  • Finance
  • Banking
  • PF
  • Companies
  • Crypto
  • Real Estates
  • Opinion
eNaira Online News
No Result
View All Result

Total supply of Stablecoins dropped sharply for first time ever in Q2 2022

by e-Naira Online News
June 16, 2022
in Crypto
Reading Time: 2 mins read
A A
0
Home Crypto
Share on FacebookShare on Twitter


The total supply of stablecoins saw its sharpest drop in history during Q2 2022, which according to data analytics firm, CoinMetrics, is attributable to the stablecoin redemptions spiking as a result of short-term liquidity and concerns about insolvency that were not present during the panic of 2020.

CoinMetrics head of research and development, Lucas Nuzzi, highlighted the data on Twitter earlier today, with a graph showing the total supply of stablecoins since January 2020. He stated, “FC is the first time in the history of stablecoins where Total Supply decreased. Even if we exclude UST, over 10B has been redeemed *directly from the treasuries* of major issuers.”

The graph he posted contained the list of stablecoins in consideration which included DAI, USDT (OMNI and TRON), SAI, USDK and PAX. Circle’s USDC and Binance’s BUSD were compiled in a separate graph. Terra’s original variant of UST was not included in the graph.

What you should know

  • Nuzzi noted that Tether saw the most redemptions of all centralized stablecoin issuers, with 7 billion of the total USDT supply wiped off the board in April and May and is likely to have been caused by actions of a few, rather than any significant market-wide movements.
  • He stated, “Tether has seen the most redemptions out of all centralized issuers, with a decrease of ~7B in total supply (on ERC, OMNI and TRX). The sharpness of that decrease suggests that a single entity, or small cohort, was behind it.”
  • The implosion of the Terra eco-system including its native LUNA token and UST stablecoin in May coincided with Tether’s USDT de-pegging from the U.S. dollar by around 5%. As a result, around 7 billion USDT was redeemed as big players looked to exit the market and avoid any further potential carnage.
  • Another project to take a big hit was Maker DAO’s DAI, which saw 40% of its supply retired, which Nuzzi attributed to liquidations. He stated, “Nearly 40% of MakerDAO’s DAI was retired as a result of liquidations, the largest liquidation event of its history.”
  • USDC and BUSD were also included in a separate graph, and also show a sharp drop in supply of around 5 billion in May, however, both have since rebounded and are close to being back to their respective all-time high levels of around $65 billion and $48 billion respectively.
  • The unique market conditions of 2022 offers an explanation as to why stablecoin users have been taking risk off the table over the past few weeks.
  • So far, the crypto sector has seen the Terra eco-system cause a crash worth around $50 billion, while lending platform Celsius and venture capital firm Three Arrows Capital have also been fighting to avoid insolvency due in part to reported liquidations, exposure to Terra, declining asset prices and potentially unsustainable business models.

Tether, which is also exposed to Celsius via a $10 million equity investment in 2020 and a $1 billion loan it gave to the company last year, issued a statement on Monday noting that the plummeting price of Celsius native token and the firm’s liquidity troubles will have “no impact” on its reserves. The firm stated that its lending activity with Celsius has “always been overcollateralized.”

Related



Source link

Tags: droppedsharplyStablecoinssupplytimeTotal
Previous Post

Dollar To Naira Exchange Rate Today (Thur. June 16, 2022)

Next Post

Self-Custody Is More Than a Feature

Related Posts

Binance operations in Nigeria is illegal – Nigeria’s SEC
Crypto

Binance operations in Nigeria is illegal – Nigeria’s SEC

by e-Naira Online News
June 10, 2023
Crypto Investor Sentiment Refuses To Budge, But Can The Weekend Change This?
Crypto

Crypto Investor Sentiment Refuses To Budge, But Can The Weekend Change This?

by e-Naira Online News
June 9, 2023
UK Financial Conduct Authority Clamps Down on Crypto Marketing
Crypto

UK Financial Conduct Authority Clamps Down on Crypto Marketing

by e-Naira Online News
June 8, 2023
Australian Bank Takes Stance Against Payments To Select Crypto Exchanges
Crypto

Australian Bank Takes Stance Against Payments To Select Crypto Exchanges

by e-Naira Online News
June 8, 2023
What is DeFi Returns? A new way of DeFi Investing » CryptoNinjas
Crypto

What is DeFi Returns? A new way of DeFi Investing » CryptoNinjas

by e-Naira Online News
June 7, 2023
Next Post
Self-Custody Is More Than a Feature

Self-Custody Is More Than a Feature

Nigeria’s Forex Funds To Drop, CBN Plans $1.7bn Arrears Payment

Nigeria’s Forex Funds To Drop, CBN Plans $1.7bn Arrears Payment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

  • Trending
  • Comments
  • Latest
Subsidy Removal: FG, Labour Unions Fail To Reach Agreement

Subsidy Removal: FG, Labour Unions Fail To Reach Agreement

May 31, 2023
World Bank revises Nigeria’s 2023 GDP downwards to 2.8%

World Bank revises Nigeria’s 2023 GDP downwards to 2.8%

June 10, 2023
SEC Bans Binance Operations in Nigeria

SEC Bans Binance Operations in Nigeria

June 10, 2023
Gov Muftwang swears in 17 LG transition chairmen

Gov Muftwang swears in 17 LG transition chairmen

June 10, 2023
Deputy Senate Presidency: What Barau Jibrin will bring to 10th Assembly

Deputy Senate Presidency: What Barau Jibrin will bring to 10th Assembly

June 10, 2023
Binance operations in Nigeria is illegal – Nigeria’s SEC

Binance operations in Nigeria is illegal – Nigeria’s SEC

June 10, 2023
Delta commuter dies in crash, police seek relatives

Delta commuter dies in crash, police seek relatives

June 9, 2023
Nigerian Exchange Weakens by 0.05% Despite Strong Investor Sentiment

Nigerian Exchange Weakens by 0.05% Despite Strong Investor Sentiment

June 9, 2023
Crypto Investor Sentiment Refuses To Budge, But Can The Weekend Change This?

Crypto Investor Sentiment Refuses To Budge, But Can The Weekend Change This?

June 9, 2023

Get the free newsletter

eNaira Online News

Get the latest news and follow the coverage of eNaira, Business & Financial, Stock Market, Analysis, and more from the trusted sources.

CATEGORIES

  • Banking
  • Business
  • Capital Market
  • Companies
  • Crypto
  • eNaira
  • Finance
  • Opinion
  • Personal Finance
  • Real estate
  • Uncategorized
No Result
View All Result

GET THE FREE NEWSLETTER

  • Disclaimer
  • Privacy Policy
  • DMCA
  • Cookie Privacy Policy
  • Terms and Conditions
  • Contact us

Copyright © 2022 e-Naira Online News.
e-Naira Online News is not responsible for the content of external sites.

No Result
View All Result
  • Home
  • eNaira
  • Capital Market
  • Business
  • Finance
  • Banking
  • PF
  • Companies
  • Crypto
  • Real Estates
  • Opinion

Copyright © 2022 e-Naira Online News.
e-Naira Online News is not responsible for the content of external sites.