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Stablecoin dominance slides as market cap falls to near 2-year lows: CCData

by Russ Turner
July 21, 2023
in Cryptocurrency
Reading Time: 3 mins read
Stablecoin dominance slides as market cap falls to near 2-year lows: CCData

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Stablecoin market capitalization has hit its lowest level since August 2021 after 16 consecutive months of declines, according to a new report.

Cryptocurrency analytics platform CCData released report On July 20, it announced that the market cap of stablecoins had fallen by 0.82% from the beginning of the month to July 17, bringing the market cap of the sector to $127 billion.

Stablecoin market dominance has slipped slightly, now at 10.3%, down from 10.5% in June.

Among the top 10 stablecoins, the Pax dollar (USDP) was the hardest hit, dropping 43.1% to $563 million in July, its lowest level since December 2020.

CCData believes that MakerDAO, the decentralized autonomous organization behind the Maker Protocol, is the main cause of this drop. MakerDAO chose to remove his $500 million in USDP from its reserves after failing to generate additional revenue.

Tether (USDT), the largest stablecoin by market cap, has managed to hit an all-time high of $83.8 billion as of July 17, increasing its dominance in stablecoin market cap to 65.9%.

USD Coin (USDC) and Binance USD (BUSD) market caps fell 3.01% and 4.57% to $26.9 billion and $3.96 billion, respectively. For USDC, it is the seventh straight month of decline in market capitalization and the lowest level since June 2021.

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Most stablecoin market caps have remained relatively stable since May, with the exception of USDP, which has fallen 43.1%. Source: CCData.

Despite successive declines, stablecoin trading volume rose 16.6% to nearly $483 billion in June, marking its first monthly increase since March.

CCData believes the Securities and Exchange Commission (SEC) lawsuits against Binance and Coinbase and a surge in Spot Bitcoin (BTC) ETF applications contributed to the increase in stablecoin trading volume last month.

Related: Aave Protocol Launches Stablecoin GHO on Ethereum Mainnet, $2 Million Minted

Another major event in June was the suspension of fiat deposits to Binance.US due to the SEC lawsuit against Binance.US. According to CCData, this means USDT and USDC have been pegged to the US dollar on exchanges.

“The suspension of statutory deposits has significantly reduced the liquidity of deposits. [USDT and USDC] For stablecoins, the discounts are around 27% and 18% respectively. ”

The decentralized stablecoin market, which includes Dai (DAI), Frax (FRAX) and USDD (USDD), increased its market cap by 0.43% to $7.52 billion in July, turning positive for the first time since February. But its market capitalization is still down 78.1% from its all-time high of $34.3 billion in April.

The beginning of this downward trend was caused by the collapse of the Terra Luna ecosystem and the almost 100% depeg of algorithmic stablecoin TerraClassicUSD (USTC).

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