The stablecoin market is seeing its total market capitalization soaring to a new all-time high of $168 billion. This marks the culmination of 11 consecutive months of growth, underscoring the increasing demand and adoption of stablecoins within the crypto ecosystem.
Data from DeFiLlama highlights that this current market cap surpasses the previous peak of $167 billion, achieved in March 2022. Notably, the data excludes algorithmic stablecoins, which maintain their value through complex algorithms rather than being pegged directly to external assets like fiat currencies or gold.
This surge is a significant recovery from the sharp decline that followed the 2022 peak, where the market cap plummeted to $135 billion by the year’s end.
The driving force behind this resurgence appears to be new capital flowing into the crypto markets. Crypto analyst Patrick Scott, known as “Dynamo DeFi,” pointed out in a recent post on X that this trend indicates fresh money entering the crypto space.
Although Scott refrained from speculating on the precise cause, he noted that retail participation has been ongoing for at least eight months. This raises questions about whether institutional investment might also be contributing to the stablecoin market’s rally.
Tether (USDT) continues to dominate the stablecoin landscape, leading the charge in this upward trajectory. At the start of 2024, USDT had a market cap of $91.69 billion. Since then, it has consistently posted monthly gains, reaching over $117 billion in market capitalization for the first time in August.
Tether’s growth isn’t just limited to its flagship product. The company recently announced plans to launch a new stablecoin pegged to the United Arab Emirates Dirham (AED) and has ambitious plans to double its workforce by mid-2025.
Circle USD (USDC) has also recorded major growth throughout the year, with its market cap climbing to over $34 billion, the highest it has reached in 2024. However, this figure still lags behind its all-time high of $55.8 billion, recorded in June 2022.
Circle is also making strides in expanding its offerings, recently announcing plans to introduce tap-and-go payments using USDC on iPhones.
Despite the growth in market capitalization, trading volumes for stablecoins have seen a decline. According to a July report by CCData, stablecoin trading volumes dropped by 8.35% to $795 billion, driven by reduced trading activity on centralized exchanges.
The report attributes part of this decrease to the regulatory landscape in Europe, particularly the impact of the Markets in Crypto-Assets (MiCA) regulations on USDT’s future in the region. As of August, trading volumes remain subdued, hovering just above $46 billion.
Donald Trump’s presidential transition team is reportedly investigating te feasibility of..
Binance has solidified its dominance in 2024, recording over $24 billion..
Qubetics Leads the Way in dVPN Innovation, Algorand Boosts DeFi Ecosystem,..
Stay ahead in crypto with AltcoinDaily.co! Get the latest news, expert analysis, and blockchain insights. Your trusted source for all things cryptocurrency. 🚀💰
Join Now