For 16 straight months, the market capitalization of stablecoins has been declining, and at $126.2 billion, it has dropped to its lowest level since August 2021.
Despite Stablecoin Market Decline, USDT Still Stands Out with Over 65% Market Share
The usage of stablecoins by traders to transfer money between platforms, perform platform-to-platform transactions, and act as a safe haven during periods of excessive volatility is vital to the cryptocurrency ecosystem. The drop in the market capitalization of stablecoins, however, may be explained by the recent shift in investment from stablecoins to rising market leaders like Bitcoin and Ether. Given that stablecoins often maintain a one-to-one ratio with conventional assets, such as the US dollar, investors may be looking for better returns and assets that generate interest.
Tether Still on the Rise
The percentage of stablecoins in the broader cryptocurrency market also marginally decreased over this time, falling from 10.5% to 10.3%. Tether (USDT), the largest stablecoin by market cap, has managed to exhibit exceptional growth despite this downturn.
At an all-time high of $83.8 billion, Tether’s market capitalization accounts for more than 65% of the total market value of stablecoins. Due to this jump in market cap domination, USDT now holds a 7.19% larger market share than it did previously.
Stablecoin Trading Volume Increased
Even though the stablecoin market faces difficulties, the number of stablecoins traded increased by more than 16% from the previous month to reach $483 billion. The market’s increased volatility, which was brought on by a lawsuit the SEC filed against two major cryptocurrency exchanges, Coinbase and Binance, is what is responsible for the surge in trading volume.
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