CoinGecko: after Tether briefly lost its dollar peg, leading to $8.5B+ in redemptions, Circle's USDC circulation rose by ~$3.4B and Binance USD gained $1.2B
BloombergEmily Nicolle
Context & Ripple Effects
The May 2022 TerraUSD collapse put Tether under its first real stress test: a brief loss of the dollar peg triggered more than $8.5B in redemptions, and CoinGecko data shows the flight went straight to rivals — Circle's USDC picked up roughly $3.4B and Binance USD about $1.2B in circulation.
Tether absorbed over $8.5B in redemptions within days of losing its peg, directly shrinking its float, while Circle and Binance captured the outflow almost one-for-one in new USDC and Binance USD supply.
Second-order effects
Peg credibility became the product: with traders demonstrably willing to switch issuers during stress, Circle could later monetize that trust by charging 0.03%+ fees on near-instant USDC redemptions above $2M, turning redemption infrastructure into a revenue line.
Third-order effects
Each depeg event resets the stablecoin league table rather than killing the category — USDC fell to $24.5B after FTX's collapse yet reached a $56.2B all-time high by February 2025, suggesting the market consolidates around whichever issuer survives the last crisis.
The trend: Stablecoin market share is being reallocated crisis-by-crisis toward issuers whose reserves hold up under redemption pressure, making peg resilience the sector's core competitive moat.
Tether bleeding another $1.5 billion and $9 billion over the past week. The fraud of unaudited reserves will be readily apparent. Commercial paper? A lie. Treasuries? So far beyond Madoff. Who believes this nonsense? Massive Ponzi. If you are still in you get what you deserve. ht…
This is a great self-own. Each one of these stable dollars leaving @Tether_to has been redeemed for fiat dollars. Gotta update the 2018 talking points. https://twitter.com/...
A lot of people assume $USDT mcap going down = #Tether's USD reserves depleting cuz redemptions. It could very well be that large MMs like Binance, Alameda and Cumberland are borrowing USDT in the billions from Tether against a variety of collateral. https://twitter.com/...
I am starting to get a sense that Bloomberg's smear articles about Tether are intentional. They appear to be misleading and full of errors. Not a good look for Bloomberg. Not sure who I should flag this to. @kgreifeld, @EricBalchunas, @mikemcglone11 https://www.bloomberg.com/...
chart crime: posting a chart showing users redeeming $9 billion over the last week implying it's a huge negative instead of just a normal market operation cash reserves available to meet client withdrawals seems.... good? https://twitter.com/...
Losing $1bn in market cap every couple of days. Tether is imploding at roughly the same rate as Russia, and may collapse at about the same time, if these conditions persist. When Tether goes, the entire crypto market falls. https://twitter.com/...
Around $10 Billion USDT has been withdrawn in the last week showing Tether has the liquidity for now but are being severely tested. If they lose the case & the public are able to see a breakdown of the reserves then this could either reassure markets or add to the panic. https://…
is it just arb on the tether situation earlier? maybe usdt -9b usdc +4b still 5b of outflows tho 5b that couldve been used to pump the mcap of our ponzis by 100b (assuming 20x multiplier effect)
1/3 The Tether story that began last week might not be done. Redemptions in Tether began last week, the day it broke its peg (down to 95 cents). They have not yet stopped. https://twitter.com/...
2/3 Its current redemptions, at 10.93%, are the largest since DeFi summer (spring 2020). The current structure of DeFi primitives have not been through this big a Tether redemption cycle. https://twitter.com/...
3/3 Curve's 3pool continues to stay unbalance at 74% Tether. Not enough for it to break the peg, but enough that Tether consistently stays in the southside of $1.00 (0.998 or so) and DAI/USDC consistently stay on the northside of $1.00 ($1.002 or so). Both round to $1.00 https://…
Should add a bit more nuance. I still feel more comfortable with my money in USDC / USDP due to quality of reserves. They are factually better than USDT reserves. Just tired of “Ponzi” talking points. Tether disclosed collateral, NY AG dove deep and left with small fine, etc. htt…
It's really weird that Tether only grows and then redeems $7bn all at once and USDC seemed to be regularly redeeming and then grew several billion basically at once https://twitter.com/...