Tether (USDT) And USD Coin (USDC):  Stablecoin Trends in H1 2023

• Stablecoin exchange supply surges hint at crypto rallies amid market turbulence.
• Around 70% of USD Coin (USDC) users are from Non-U.S. countries.

In a volatile quarter for the cryptocurrency industry, stablecoins have emerged as key indicators for impending market surges, while leading exchange Huobi faces intensified scrutiny. The ongoing tug-of-war between regulatory uncertainty and market optimism has kept investors on their toes.

Historically, the movement of stablecoins such as Tether (USDT) and USD Coin (USDC) onto exchanges has served as a prelude to crypto rallies. This trend held true in recent months, with both USDC and USDT influxes in December and February preceding notable price hikes. Furthermore, the surge in USDC supply in July has added to the upward momentum.

Jeremy Allaire, CEO of Circle, estimated that approximately 70% of USDC adoption originates from countries beyond the United States. In an August 8 tweet, he highlighted this high non-U.S. adoption rate, stating that it remains strong in emerging and developing markets across Asia, Latin America (LATAM), and Africa.

Tether (USDT) And USD Coin (USDC) Revisited

Tether Holdings, the entity behind USDT, unveiled impressive Q2 figures, with surplus reserves skyrocketing by a staggering $850 million. It was accompanied by operational earnings exceeding $1 billion between April and June 2023. However, Tether’s inability to declare a net profit for Q2, coupled with a lower operating profit compared to the previous quarter, has generated scrutiny.

In contrast, Q3 unfolded like a rollercoaster, with the Securities and Exchange Commission (SEC) casting a looming shadow over the crypto market. Tensions escalated as the SEC’s actions ignited concerns and fueled uncertainty among investors.

Huobi and Stablecoins

Amid ongoing Chinese regulatory investigations, Huobi, a prominent cryptocurrency exchange, became embroiled in controversy. Rumors of insolvency and leadership arrests swirled, prompting the exchange’s total value-locked (TVL) data to fluctuate.

However, A Huobi spokesperson swiftly discredited these claims as “fake news.” It’s worth noting that Huobi’s stablecoin reserves, including Staked USDT (stUSDT), USDC, and other stablecoins, were reported at varying percentages according to Nansen data and DefiLlama.

As the industry’s storm continues, key players remain instrumental. In a surprising twist, Justin Sun, founder of TRON, reportedly withdrew $200 million USDT from JustLend, channeling it into Huobi. This strategic move bolstered Huobi’s reserves to $285 million, adding yet another layer of intrigue to the unfolding narrative.