Stablecoins, a crucial component of the crypto ecosystem, have witnessed a remarkable surge as the market cap recently surpassed $142 billion, marking its highest point since 2022. This milestone has been propelled by notable developments, including the resurgence of Circle’s USDC (USD Coin) and the continued growth of Tether (USDT), as highlighted in recent reports.
Stablecoins join the crypto bull run
At the time of writing, the global crypto market capitalization is $2.25 trillion, up 7.33% in the last 24 hours and 99.41% in the last year. As of today, Bitcoin’s (BTC) market capitalization is $1.11 trillion, reflecting a 49.4% dominance. Meanwhile, stablecoins’ market capitalization stands at $142 billion, accounting for 6.32% of the overall crypto market cap.
Stablecoins are cryptocurrencies designed to maintain a stable value by pegging them to external assets like fiat currencies or commodities. They offer stability and are often used as a hedge against the volatility of other cryptocurrencies.
Examples of stablecoins in the present crypto market include:
1. Tether (USDT) – Pegged to the US dollar.
2. USD Coin (USDC) – Also pegged to the US dollar.
3. Dai (DAI) – Maintained through over-collateralization in the MakerDAO system.
4. Binance USD (BUSD) – Backed by US dollars held in reserves.
5. TrueUSD (TUSD) – Fully collateralized by US dollars held in escrow accounts.
6. Paxos Standard (PAX) – Each token is backed by one US dollar held in reserve.
These stablecoins play a crucial role in facilitating transactions and providing stability within the volatile crypto market.
Stablecoins market performance
Stablecoins’ entire market valuation surpassed $142 billion in February, according to CoinGecko. This is the greatest level since December 2022, according to DefiLlama data.
In early November, the stablecoin market began to expand significantly, ending an 18-month decline. Since then, the market cap has increased by 12%, or roughly $15 billion, with about $10 billion of the growth occurring since the start of the year.
Tether’s USDT, the market’s largest stablecoin, has grown to a new all-time high of $98 billion, adding about $2 billion in the last month, according to CoinGecko data. While USDT drove stablecoin growth late last year, the expansion this year is more broad-based.
USDC, the second-largest stablecoin created by Circle and backed by crypto exchange Coinbase, has enjoyed a revival, rising to more than $28.5 billion from $24 billion at the beginning of the year, according to CoinGecko. It increased by about $2.5 billion in the last month, exceeding Tether’s growth during the same period.
According to Binance, the current price of Dai is $0.9998 per (DAI / USD), with a market cap of $5.35 billion USD. The 24-hour trading volume is $134.19 million USD. Dai is down 0.04% in the last 24 hours, with a circulating supply of 5.35B.
The current price of BUSD is $ 1.002804 per (BUSD/USD), with a market cap of $ 84.75 million USD. The 24-hour trading volume is $28.84 million USD. BUSD has gained 0.12% in the last 24 hours, with a circulating supply of 84.51 million.
TrueUSD is now priced at $0.976585 per (TUSD / USD), with a market cap of $1.26 billion USD. The 24-hour trading volume is $117.15 million USD. TrueUSD is up 0.23% in the last 24 hours, with a circulating supply of 1.29 billion.
Paxos Standard is currently priced at $1.00 per PAX. With a circulating supply of 207,754,730.881 PAX, Paxos Standard has a market cap of $207,863,636.54.
USDC’s recovery could be attributed to the fact that bitcoin’s surge this year was driven by strong U.S. investor demand, where USDC is more popular among traders. Meanwhile, USDT is the most popular currency in Asia, Africa, and Latin America among traders on offshore exchanges like Binance.
The surge corresponded with Binance relisting several USDC trading pairs late last year and the launch of bitcoin spot ETFs in the United States, with many of those funds using Coinbase for BTC settlements, according to a Coinbase market analysis released on Monday.
According to the research, USDC is expanding its influence – albeit only slightly – outside of US markets, with its market share in derivative and spot trade settlement on worldwide centralized exchanges rising to roughly 4% from less than 1% in mid-2023.
