• Stablecoin balance on exchanges is at a 2-year low and over $22 billion has completely fled in the last 5 months.
• Treasury yields above 5% have given investors viable alternatives, while BUSD shutting down and USD Coin being caught up in the SVB collapse have both pushed money out.
• Tether still holds the highest market share of two years despite 30% of its supply on exchanges leaving since FTX collapsed six months ago.
Stablecoin Balance at Two-Year Low
A report into crypto’s capital flight reveals that the balance of stablecoins on exchanges is at a 2-year low. In the last 5 months, over half the stablecoin balance on exchanges has flowed out, equivalent to $22.8 billion.
Treasury Yields Provide Alternative Investment Options
Treasury yields above 5% have given viable alternatives for investors, causing capital to flee from stablecoins.
BUSD Shutting Down & USD Coin Caught Up with SVB Collapse
The shutdown of BinanceUSD issuer SEC due to violations of securities laws meant that Binance’s branded stablecoin had to be terminated, leading to its gradual decline in market cap. Also, USD Coin which is domiciled in the US was affected by the collapse of Silicon Valley Bank as 8.25% of its reserves were held there, causing a brief drop in its peg value to 92 cents and amplified outflows from already slipping USDC market cap numbers.
Tether Market Share Growing Despite Outflows
Despite 30% of Tether’s supply leaving exchanges since FTX collapsed six months ago, it still holds its highest market share in two years. All other major stablecoins have also seen significant outflows from exchanges compared to before November when FTX first collapsed.
Capital Flight Showing No Sign Of Slowing Down
The exodus shows no sign of slowing down as over half the total supply of stablecoins on exchanges has now fled in five months, equivalent to $22.8 billion worth of funds leaving crypto markets altogether.