Anniversary of the Terra Crisis: The Fall of Stablecoins

After the Terra crisis a year ago, the turmoil that started in stablecoins took USDT to the top.

On May 11, 2022, there was a massive crypto crash with the Terra crisis. Terra, the architect of this collapse, led to the removal of $ 45 billion from the market.

A year later, it seems that the crypto industry still hasn’t recovered and stablecoins are taking shape. USDT in particular stands out with a 20 percent dominance gain after Terra crashed.

One Year After the Terra Crisis: The Rise of USDT!

Glassnode remembered the Terra crisis with the data it published today. Glassnode, which created a market dominance chart over stablecoins, discussed two different periods.

Before the Terra crisis, three different stablecoins took the share of USDT in stablecoin market dominance. Coins dispersed to USDC, BUSD and DAI were causing the USDT to drop.

However, in the Terra crisis that took place on May 11, 2022, the depeg of UST and crashing the entire crypto market changed the way investors view stablecoins. While the interest in the DAI side was decreasing day by day, the crises started to break out on the BUSD side. BUSD fell under the radar of US regulators and had to cease its services. USDC, on the other hand, followed a long-term downtrend due to FUDs and pressures. This entire market process has allowed USDT to peak in stablecoin market dominance day by day.

According to Glassnode data, before the Terra crisis, USDT’s stablecoin market dominance was around 45.9 percent, while USDC’s stablecoin market dominance was around 37 percent. These two popular cryptocurrencies were followed by BUSD with 11.8 percent dominance. DAI, on the other hand, was able to get 4.5 percent of the market share.

Exactly one year after the Terra crisis, USDT’s market dominance increased to 65.9 percent. Having achieved a market share of 20 percent in the stablecoin market, USDT has begun to be seen as a safe haven. However, the SEC said that all cryptocurrencies traded in dollars are in their area of ​​interest.