USDC's dominance has declined by 12% since the beginning of the year
Date: 2023-08-30 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
The USD Coin (USDC) stablecoin’s share of dominance in the stablecoin supply on Ethereum has declined markedly since the beginning of the year. This is evidenced by data from The Block.
So, if at the beginning of the year the stablecoin from Circle occupied almost 45% of the market share of “stable coins”, now this figure has dropped to less than 33%. This may indicate a significant decrease in USDC dominance compared to other stablecoins in the Ethereum ecosystem, the analysts noted.
On the contrary, the market share of Tether (USDT) has increased markedly over the same period. USDT, the largest stablecoin by market capitalization, experienced a change in its market share from around 30% at the beginning of this year to ~53%.
What is the reason for the rise in USDT dominance
Several factors may contribute to this change in dynamics. Thus, the growth in demand for stablecoins is due to their usefulness for facilitating transactions, as well as their role as a store of value and providing liquidity in the wider cryptocurrency ecosystem. As the use of stablecoins grows, so does the market.
In addition, changes in the regulatory framework, partnerships, and technological advances may also affect the adoption and use of specific stablecoins. Tether, for example, has maintained its status as one of the oldest stablecoins and has expanded its offering to various blockchain platforms outside of Ethereum.
The supply of stablecoins continues to fall
However, despite the hype in the stablecoin market due to the launch of PayPal USD (PYUSD), the supply of this asset class has continued to decline for more than a year, according to analysts at The Block.
The total supply of stablecoins has been declining since mid-2022. In 2023, supply fell about 12% from $139 billion at the start of the year to $122 billion in August. Some believe that the decline may stop, especially with the entry of PayPal into the stablecoin sector.
