Investors moved around $1.6 billion from USDC to rival stablecoin USDT over the past month as regulators in the U.S. clamped down on cryptocurrency companies.
A significant sum switched over to USDT after Aug. 10, when Circle, issuers of USDC, froze $75,000 USDC belonging to users linked with Tornado Cash, the crypto mixer sanctioned by the American government on money laundering allegations.
Circle said it froze the money to comply with U.S. sanctions law. But the decision provoked widespread criticism from crypto fundamentalists, concerned that corporate intrusion had eroded the cryptocurrency ethos of privacy and decentralization.
Investors flee USDC
According to Coinmarketcap, the total market capitalization of Tether’s eponymous USDT stablecoin swelled by about $1 billion to $67.43 billion in the five days following the blacklisting of Tornado Cash-related wallet addresses by Circle.
USDC’s total market value slumped by more than $500 million over the same period, the data shows, suggesting the outstanding balance in transfers to USDT may have originated from elsewhere.
Over the past four weeks, USDC’s market cap fell 2.3%, or $1.3 billion, to $53.5 billion as of Press time. That compares with a rise of 2.4%, or $1.57 billion, in the total market cap of USDT during the same period.
“After the recent regulatory push in the U.S. against crypto companies and tokens, I wouldn’t be surprised if institutions and larger players felt safer with their money outside the U.S.,” tweeted Gabor Gurbacs, strategy advisor at asset manager VanEck.
Both USDC and USDT are pegged to the dollar. While Hong Kong-based Tether has often been accused of a lack of transparency over the reserves backing its USDT stablecoin, Centre, the U.S. consortium behind USDC, is criticized for cozying up to government authorities.
Since the launch of USDC in September 2018, Centre has now banned 81 wallet addresses in compliance with U.S. government sanctions on crypto firms, individuals, or groups.
Tether had its own problems in May when panicky investors withdrew about $7 billion worth of USDT in a matter of days after the spectacular collapse of the Terra blockchain.
‘Crypto needs truly decentralized stables’
Ego Huang, CEO of crypto derivative trading platform Deepcoin, told Be[In]Crypto that USDC is hamstrung by assumptions of its “close dependence on the U.S. government’s regulatory regime.”
“[This makes] it very prone to being seized by American authorities,” he said. “The fact is that investors are not sentimental about any stablecoin issuer. Instead, they are interested in the safety of their funds and avoiding the intervention of centralized authorities.”
Huang added that the lack of defined regulation was “notably a tough one and no matter how Circle spins the situation to prevent a liquidity exodus from USDC, investors will still need an insurance or safety net, which they can find in USDT.”
Circle CEO Jeremy Allaire recently pledged more engagement to address privacy concerns that have dogged the company.
He said the Tornado Cash “regulatory intervention was flawed.” Allaire is committed to ramping up action on policy engagement to better protect user privacy in line with the foundational principles of crypto.
Iakov Levin, founder and CEO of crypto investment platform Midas Investments, said the “situation with Tornado Cash shows that no one is immune to the influence of regulators.”
“So, if they want to interfere with any part of the developing decentralized economy, then absolutely any protocol can find itself in Tornado’s place,” Levin told Be[In]Crypto. Continuing, he said:
“The users’ move from USDC to USDT is just a shift from one centralized stablecoin to another. Noone can guarantee that USDT will not release similar sanctions and start blocking wallets. That’s why the crypto market needs overcollateralized algorithmic stablecoins like FRAX and LUSD.”
The post Investors Dump $1.6B in USDC for USDT Amid Regulatory Clampdown appeared first on BeInCrypto.
Source: Markets – BeInCrypto
Veteran Investor Mark Mobius Expects Bitcoin Price to Fall to $10,000
Veteran investor Mark Mobius, the founder of Mobius Capital, expects the price of bitcoin to fall to $10,000. Nonetheless, he said: “Crypto is here to stay as there are several investors who still have faith in it.” Mark Mobius’ Bitcoin Price Prediction The founder of Mobius Capital Partners, Mark Mobius, shared his latest bitcoin price […]
Veteran investor Mark Mobius, the founder of Mobius Capital, expects the price of bitcoin to fall to $10,000. Nonetheless, he said: “Crypto is here to stay as there are several investors who still have faith in it.”
Mark Mobius’ Bitcoin Price Prediction
The founder of Mobius Capital Partners, Mark Mobius, shared his latest bitcoin price prediction in an interview with Bloomberg Monday.
Prior to starting his own company, Mobius spent more than three decades at Franklin Templeton Investments. He previously served as the executive chairman of Templeton Emerging Markets Group where he managed more than $50 billion in emerging markets portfolios.
The veteran investor said that his next target for bitcoin is $10,000, noting that cryptocurrencies are “too dangerous” for him to invest his own cash or his clients’ money in.
Despite the collapse of crypto exchange FTX and subsequent market sell-offs, Mobius emphasized:
Crypto is here to stay as there are several investors who still have faith in it … It’s amazing how bitcoin prices have held up.
This was not the first time that the former Franklin Templeton executive mentioned $10,000 as his target for bitcoin’s price. In May, he advised investors against buying the dip, cautioning that the market still had some way to fall. In November last year, he said people should not look at cryptocurrencies as a means to invest but as “a means to speculate and have fun.”
Mobius is not alone in expecting the price of bitcoin to drop to $10,000. Doubleline Capital CEO Jeffrey Gundlach, aka the bond king, said in June: “I wouldn’t be surprised at all if it [bitcoin] went to $10,000.” Gold bug and economist Peter Schiff said this month that bitcoin still has a long way to fall. He valued BTC at $10K. Moreover, a recent Bloomberg MLIV Pulse survey showed that the majority of nearly 1,000 investors who responded expect bitcoin’s price to drop to $10K.
Meanwhile, some people are still very optimistic about the price of BTC. Venture capitalist Tim Draper, for example, said earlier this month that he expects bitcoin’s price to hit $250K by mid-2023.
Do you think the price of bitcoin will drop to $10K? Let us know in the comments section below.
Source: Markets and Prices Archives – Bitcoin News