Understanding Transfer Volumes and Why USD₮ Remains on Top

Cointelegraph recently published an article titled “USDC's ERC-20 transfer volume hit 5X USD₮’s in fallout from FTX collapse”. They open the article by saying:

“Circle's Stablecoin USD Coin has grown in popularity on Ethereum since the collapse of FTX. USDC's ERC-20 variant now frequently reaches daily transfer volumes four to five times that recorded by major competitor Tether on the network according to data from blockchain analytics firm Glassnode. That’s despite the total market cap of USD₮ being $23 billion greater than USDC. As of Jan. 10, the difference was in USDC’s favor by a margin of four and a half times.

This is an extremely inaccurate report on the question of “Does either USD₮ or USDC have higher transfer volumes relative to their marketcap?” Cointelegraph could have just as easily reported the following story using the exact same logic:

“Tether’s Stablecoin USD₮ has grown in popularity on Tron. Tether’s USD₮ TRC-20 has reached a total 24 hour transfer count 891 times higher than that recorded by major competitor USDC.”

This statement would also be factually accurate, but both are a flawed way of looking at the situation! 

Here are the facts:

1) Both USDC and USD₮ are issued on multiple blockchains
2) On some blockchains USD₮ is used more than USDC and on others USDC is used more than USD₮
3) The only objective comparison is to add up these numbers across multiple blockchains

And if we did this, what would it show us?

On January 17th, the day this article was written USD₮ traded 10x more volume than USDC despite its marketcap being only roughly 50% larger.

Looking at this question from a different angle, we can compare the number of unique holders of each coin on their top three chains.

USD₮ has 16,640,097 unique holders on Tron

USD₮ has 3,993,999 unique holders on Ethereum

USD₮ has 449,981 unique holders on Solana

USDC has 1,215,427 unique holders on Polygon

USDC has 1,584,336 unique holders on Ethereum

USDC has 1,430,039 unique holders on Solana

Based on this it's apparent that USD₮ has more unique holders on Ethereum alone than USDC has across Polygon, Solana, and Ethereum, and USD₮ has 4x this number of holders on Tron!

Returning to the subject of transfer counts, even when we look solely at Ethereum during the timeframe Cointelegraph highlighted we see additional context they refrained from commenting on.

While it is true that the total number of USDC transfers during mid-January was higher than the total amount of USD₮, this doesn't capture the whole picture.

USD₮ had twice as many total transactions on Ethereum alone during this limited timeframe than USDC.


USD₮ had close to three times as many unique users/receivers as USDC on Ethereum alone during this timeframe.

So how did USDC transfer 5x more than USD₮ during a week in January despite have half as many total transactions and a third less total users transacting? Larger users made up a much larger percentage of that volume, meaning USDC is used less by normal people engaged in real economic transactions and more by large players transferring balances around. This directly contradicts USDC latest marketing materials which feature claims that USDC is being mainly used to support real-world economic transactions.

In fact, looking at January 17th the metric used by Coin Telegraph would show roughly $16bn in "transfer volume" for USDC. Digging a little deeper we see that Circle and the USDC contract burned and minted a material portion of this volume. Up to $2bn of this volume (12.5% of total) can be accounted for between burn and mint (and subsequent transfers to/from) transactions. While it's not possible to know exactly which tx are being excluded from Coin Telegraphs metric these activities by Circle could account for $2bn of the $16bn in "transfer volume".

Even accounting for all of this, the transfer volume also appears to be continually inflated by a relationship between Circle and Coinbase where large transfers are the norm.

This then begs the question of what % of this transfer volume is composed of exchanges interacting with their own wallets, with Circle subsidiaries, and funds and other investments using USDC as a dollar proxy versus actual real economy transactions which Circle is pivoting their narrative to?

In its marketing deck, Circle states the following: “This suggests that USDC may already support a significant amount of real-world economic transactions as well as financial inclusion goals.”

If that were the case, why does USD₮ continue to outrank USDC in terms of actual numbers of users, holders, unique transactions, overall volume and numbers of transactions?

Instead of desiring and aspiring to become a pure CBDC, Tether realizes that the future of USDt and XAUt are more and more directed towards supporting communities around the world that have been ignored and forgotten by the finance industry. Nothing else matters.

If this were truly the case, one must ask why you never see the following headlines and posts from businesses in Turkey, Lebanon, and other countries struggling with failing currencies for USDC?

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