According to a new report from cryptocurrency analytics platform CCData, the market capitalization of stablecoins has reached its lowest level since August 2021. The report, released on July 20, reveals that the stablecoin market cap fell 0.82% from the beginning of the month until July 17, bringing the sector’s market cap to $127 billion. Additionally, stablecoin market dominance slightly decreased from 10.5% in June to 10.3%.
Among the top ten stablecoins, Pax Dollar (USDP) experienced the greatest decline, falling by 43.1% to $563 million in July. This is the lowest figure for USDP since December 2020. CCData attributes this significant drop to MakerDAO, a decentralized autonomous organization behind the Maker protocol. MakerDAO removed $500 million of USDP from its reserves due to a failure to generate additional revenue.
In contrast, Tether (USDT), the largest stablecoin by market cap, reached an all-time high market cap of $83.8 billion as of July 17. This increase pushed its stablecoin market cap dominance to 65.9%. USD Coin (USDC) and Binance USD (BUSD) experienced declines in their market caps, falling by 3.01% and 4.57%, respectively. USDC has seen seven consecutive months of decline in its market cap, reaching its lowest point since June 2021.
Despite the decreasing market capitalization, stablecoin trading volumes recorded a 16.6% increase to approximately $483 billion in June. This marks the first monthly increase since March. CCData suggests that the lawsuits against Binance and Coinbase by the Securities and Exchange Commission (SEC) and the surge in spot Bitcoin (BTC) exchange-traded fund filings contributed to this rise in trading volumes.
Related Post
Another noteworthy event in June was the suspension of fiat deposits on Binance.US due to the SEC’s lawsuit against the exchange. This led to USDT and USDC detaching from the U.S. dollar on the platform, resulting in a discount of around 27% and 18%, respectively.
On the decentralized stablecoin market front, which includes Dai (DAI), Frax (FRAX), and USDD (USDD), the market cap increased by 0.43% to $7.52 billion in July. This marks the first positive month for the decentralized stablecoin market since February. However, the market cap is still 78.1% lower than its all-time high of $34.3 billion in April.
This downward trend in the decentralized stablecoin market originated from the collapse of the Terra Luna ecosystem and the near 100% depeg of the algorithmic stablecoin TerraClassicUSD (USTC). The market cap of decentralized stablecoins has been on a gradual decline since April, with the recent increase being the first sign of recovery since then.
In conclusion, the market capitalization of stablecoins has hit a new low since August 2021, recording 16 consecutive months of decline. While several stablecoins experienced significant decreases in their market caps, Tether reached an all-time high market cap. Stablecoin trading volumes also saw a notable increase in June, attributed to various factors such as legal actions against exchanges and Bitcoin-related filings. The decentralized stablecoin market showed signs of recovery with a slight increase in market cap after a prolonged downward trend.
