Stablecoin Market Capitalization Hits Record High, Underscoring Ongoing Growth Amid Slight Dominance Dip
Summary:
The stablecoin market cap continues to grow, reaching a high not seen since April 2022, according to a report by CCData. Despite a slight decrease in market dominance, stablecoin growth persists, with Athena USDe and Tether (USDT) experiencing significant increases. An all-time high was also achieved in the trading volume of USDC pairs, showcasing growing demand. However, trading volumes on centralized exchanges have dropped. The report concludes that the stablecoin market has recovered from previous losses caused by Terra Luna's ecosystem collapse and the depeg of TerraClassicUSD (USTC).
A fresh assessment from crypto analysis firm CCData reveals that the stablecoin market cap has experienced its eighth straight month of expansion, tipping it to its highest level since April 2022. Issued on the 29th of May, the report showed a 0.63% uptick in stablecoin market cap since the beginning of the month, landing at $161 billion. The stablecoin market's dominance, however, suffered a minor slump to 6.07%, falling from the 7% recorded in March.
The report suggested that a surge in the prices of considerable crypto assets, ignited by the unexpected green light given to a spot Ethereum ETF in the U.S., primarily triggered this drop. Athena USDe, being among the top ten stablecoins, had a market cap that has continued to grow for five consecutive months. It experienced an 11.6% rise to $2.61 billion, a surge caused by an increase in its usage as collateral for perpetual trading on Bybit.
Tether (USDT), which holds the title for the largest stablecoin by market cap, had a record market cap of $111 billion on May 29. This surge bolstered its dominance in the stablecoin market cap to 69.3%. BlackRock's tokenized fund token, BUIDL, experienced a 19.6% boost, hitting $448 million, claiming the title of the biggest tokenized treasury fund and outpacing Franklin Templeton's BENJI. BUIDL, which signifies a stake in BlackRock’s USD Institutional Digital Liquidity Fund, can be exchange seamlessly with USDC on a 1:1 basis.
Further results from CCData's report showed a growth in Circle’s USDC (USDC) market cap for the sixth month in a row, hitting $32.6 billion in May. The rise in USDC pairs set a new record, with the highest monthly trading volume coming in March. Additionally, USDC's market percentage in terms of trading volume enjoyed a boost for the second month, reaching 8.27%.
According to the report, USDC is enjoying the fruits of elevated on-chain trading activities on networks such as Base and Solana. Consequently, the percentage of USDC supply on these chains has risen to 9.29% and 7.78% respectively. Contrastingly, trading volumes of stablecoins on centralized exchanges slid to a monthly nadir of $829 billion as of May 23. The report explains that the two months following the Bitcoin halving event typically see a reduction in trading activities on centralized exchanges.
CCData's report rounded off by echoing that the total market cap of stablecoins has bounced back from the setbacks it suffered following the implosion of Terra Luna's ecosystem and the near-total alignment of the algorithmic stablecoin TerraClassicUSD (USTC) with its tied asset, both of which started a seventeen-month downslide.
Lastly, it's vital to remember that this article does not dispense any form of investment counsel or recommendations. Investing and trading always come with risks, and it's the responsibility of readers to dig deep and do their homework before making any decisions.
Published At
5/30/2024 1:10:04 AM
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