Stablecoins have hit a new milestone. (Photo by Costfoto/NurPhoto via Getty Images)
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Key Takeaways
The stablecoin market capitalization hit a new all-time high after two years.
Tether leads the stablecoin charts with over 70% market share, followed by USDC with 20%, and the rest, 8%, is shared among smaller-cap stablecoins.
A rise in stablecoin markets is considered a bullish sign as it reflects the flow of new money into crypto.
In a resounding display of strength, the crypto stablecoin market has shattered its previous record, surging past $168 billion for on Aug. 25.
This milestone marks a remarkable turnaround, coming two years after the market’s last peak in March 2022.
According to DeFiLama’s data, the stablecoin market has now notched an impressive 11-month winning streak with no signs of slowing down.
Stablecoin market share| Credit: DeFiLama
Stablecoins Make Remarkable Recovery Post 2022 Bear Market
After hitting a peak of $167 billion towards the end of the last bull run in March, the stablecoin market lost over $32 billion by the end of 2022.
The downtrend continued in 2023 as the stablecoin market fell to $121 billion by Aug. 2023 before fully recovering with 11 consecutive months of progress.
The stablecoin market’s remarkable growth is largely driven by the top issuer, Tether, which holds a commanding market share of $117.8 billion.
Circle’s USDC, the second largest stablecoin, trails behind with a $34.3 billion market share. The DeFi-focused DAI stablecoin takes third place, with a $5.3 billion market share, followed by smaller players like PaypalUSD and First Digital USD.
Tether’s dominance is evident, with a staggering 71% market share, followed by Circle’s USDC.
While USDT has continued to make significant gains, adding over $40 billion to its market cap since March 2022, other stablecoins, such as USDC, have failed to gain similar traction. In fact, USDC’s market cap has declined by nearly $20 billion since July 2023.
What Does Growing Stablecoin Market Mean?
Stablecoins started as a crypto onboarding tool, often used by new traders to convert their fiat into stablecoin and then trade the stablecoin for their choice of crypto.
However, over the years, stablecoins have become a fundamental crypto tool for offering liquidity, new trading pairs, and crypto payments.
A rising stablecoin market is considered a bullish sign, highlighting high demand. Market analysts have said it’s a sign of new money flowing into the market.
The rise of the stablecoin market has historically coincided with a bull run, and with it, the crypto market marking a new record high thanks to the flow of new money into stablecoins.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
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