Kaiko, a crypto market data provider, has conducted an analysis which revealed that USD Coin (USDC) has become the most liquid stablecoin on centralized exchanges (CEXs). The asset has approximately $38 million bids preventing a .1% price deviation. USDC’s liquidity is followed by that of Tether (USDT), Binance USD (BUSD), True USD (TUSD), and Dai (DAI).
Stablecoin Spot Markets Essential for Price Discovery
Stablecoin issuers like Circle and Tether ensure their tokens maintain their parity, but de-pegging can still occur on spot markets. This has made stablecoin spot markets essential for price discovery. Kaiko’s data includes the .1% bid-side depth across all markets that use USDC as a base asset. The data aggregates .1% bid-side market depth across all markets that include the stablecoin as a base asset.
USDC’s recent dominance on CEXs can be attributed to crypto exchange Coinbase raising the rewards with the asset to 4%. The trading platform announced in a tweet on June 15 that it is increasing its incentive for USDC holders from 2% to 4%, a move aimed at luring more users and boosting its position in the market. Meanwhile, USDT, now the second most liquid stablecoin on centralized exchanges, traded below the $1 price range during the week. The asset was worth $0.99 at writing time, due to the ongoing Curve-Aave loan saga.
The latest development is significant for USDC, as USDT has always been in the lead. At the start of the year, USDC and DAI had very little usage on CEXs, being mostly traded within the decentralized finance (DeFi) ecosystem, according to Kaiko. Nevertheless, USDC has stabilized and is striving to remain in the $1 price range, per data from CoinMarketCap.
USDC has become the most liquid stablecoin on centralized exchanges, thanks to its approximately $38 million bids preventing a .1% price deviation. Stablecoin spot markets have become essential for price discovery, and USDT is now the second most liquid stablecoin on centralized exchanges due to the ongoing Curve-Aave loan saga. USDC’s dominance on CEXs can be attributed to Coinbase raising the rewards with the asset to 4%.