- The stablecoin market cap has hit its second-highest mark in history.
- USDT held over half of the market cap at press time.
As a seasoned researcher with years of experience navigating the intricate world of cryptocurrencies, I find it fascinating to observe the contrasting dynamics within different market segments, such as the recent record-high stablecoin market cap amidst an overall downtrend in the crypto market.
Despite a widespread drop in the value of most cryptocurrencies, causing a decline in the total market capitalization, the sector of stablecoins demonstrated unusual resilience and reached an all-time high in terms of market capitalization.
This divergence highlighted the unique dynamics within different segments of the crypto market.
Stablecoin market cap hits record
Since late 2020, the market value of stablecoins has experienced significant growth, mirroring the overall increase in the market as a whole.
The expansion here was mainly fueled by an increasing curiosity about decentralized finance (DeFi) and a broader adoption and usage of stablecoins.
In early 2022, the total value (market cap) of stablecoins peaked at an all-time high of $154 billion. Yet, after reaching this peak, there was a significant decrease in market cap, which fell to approximately $116 billion.
In 2024, despite a dip, there were indications that the market cap was rebounding and becoming more stable, with an increase in value. At present, the total market cap of stablecoins stood at approximately $153.2 billion, getting close to its highest recorded value.
Possible reasons for the increase
The increasing value of the total assets held in stablecoins points to a high level of liquidity within the crypto market. This makes it simpler for both traders and investors to buy and sell these digital currencies more easily.
As a researcher, I’ve observed an increase in the market cap of stablecoins, particularly during times of wider market instability. This trend appears to signify a shift towards safer investments within the cryptocurrency sphere, as investors seek refuge amidst market turbulence.
Investors are increasingly choosing to put their money into stablecoins, digital currencies that usually mirror the value of reliable assets such as the U.S. dollar. This trend indicates a more conservative investment strategy.
Instead, when the total value (market cap) of stablecoins drops while investments flow into more unpredictable cryptocurrencies, it might suggest that investors are feeling optimistic, or ‘bullish.’ This trend usually signals a higher tolerance for risk.
USDT, USDC hold dominant market shares
According to AMBCrypto’s study, the stablecoin market is primarily controlled by Tether (USDT) and USD Coin (USDC).
At this moment, as I pen down these words, Tether’s market capitalization surpasses an impressive figure of $115 billion. Remarkably, it continues to hold its title as the dominant player in the realm of stablecoins, maintaining a significant lead over its competitors.
Compared to others, USDC boasted a market capitalization exceeding $34 billion, making it the second-largest and most influential stablecoin on the market.
Examining the market capitalization fluctuations, it’s clear that Tether (USDT) has seen substantial growth lately. A significant spike happened approximately on July 8th, as its market cap leaped from $114 billion to $115 billion at that time.
Since then, there’s been a small increase in its market value, currently standing around $115.4 billion.
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2024-08-10 03:04