Stablecoin capitalization fell to its lowest level since August 2021
Date: 2023-07-23 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
The market capitalization of stablecoins has reached its lowest level in almost two years, since August 2021. This is stated in the CCData report
According to the study, the market capitalization of stablecoins fell by 0.82% from the beginning of the month to July 17, bringing it to $127 billion. Moreover, the dominance of stablecoins decreased slightly, amounting to 10.3% compared to 10.5% in June. However, despite the decline in market share, stablecoin trading volumes rose 16.6% to approximately $483 billion.
How the performance of the largest stablecoins has changed
Of the top ten stablecoins, the Pax Dollar (USDP) took the brunt. The token fell 43.1% to $563 million in July. This is the lowest figure since December 2020.
Analysts believe that the negative dynamics is mainly due to MakerDAO. The decentralized autonomous organization decided to withdraw $500 million from its reserves because it was unable to generate additional income.
The largest stablecoin by market capitalization, Tether (USDT), reached an all-time high of $83.8 billion in market capitalization as of July 17. The token increased its share of the stablecoin market to 65.9%.
The market capitalization of USDT's main competitor — USD Coin (USDC) — and Binance USD (BUSD) fell by 3.01% and 4.57% to $26.9 billion and $3.96 billion, respectively. Circle's stablecoin has been losing market capitalization for the seventh month in a row, and its share was the lowest since June 2021.
As for the decentralized stablecoin market, it increased its market capitalization by 0.43% to $7.52 billion. Thus, July was the first month with positive dynamics since February. However, the market capitalization of decentralized stablecoins is still 78.1% below its all-time high.
How U.S. regulators have affected the market
According to CCData, lawsuits against crypto exchanges Binance and Coinbase from the US Securities and Exchange Commission (SEC) and a sharp increase in the number of applications for spot bitcoin ETFs contributed to an increase in stablecoin trading volumes last month.
Another important event for the stablecoin market was the suspension of deposits in fiat currency on the Binance.US crypto exchange. As a result, this led to the decoupling of USDT and USDC from the US dollar on the platform. These stablecoins decreased in price by 27% and 18%, respectively.
