As a seasoned crypto investor with a few years under my belt, I’ve seen the stablecoin market go through its fair share of ups and downs. The latest news of its rebound in May 2024, achieving a market capitalization of $161 billion, is certainly promising. This marks the highest level since April 2022 and is a testament to the resilience of this sector.
In May 2024, the stablecoin market experienced a recovery, reaching a total value of $161 billion, signifying a 0.63% growth from the beginning of the month.
Based on CCData’s information, this signifies the peak level since April 2022, after a succession of eight months showing consistent expansion.
Tether Dominates as Stablecoin Market Rebounds
Over the past few weeks, the market share of stablecoins has dipped slightly, decreasing from 7% in March to 6.07% in the present month. This decline can be attributed to a rebound in crypto asset prices following the unexpected approval of a spot Ethereum ETF in the United States.
Furthermore, the trading volume for stablecoins on centralized exchanges reached an all-time low of $829 billion on May 23rd. The report emphasized that following the Bitcoin halving in April, trading activity on these exchanges has witnessed significantly lower levels compared to historical norms.
As a crypto investor, I’m excited to share that Tether (USDT), the largest stablecoin in the market, reached an impressive new milestone with a record-breaking market capitalization of $111 billion as of May 29th. This achievement significantly boosted its dominance within the stablecoin industry, now accounting for 69.3% of the total market share.
As a crypto investor, I’ve noticed an impressive growth in Athena USDe’s market cap among the leading stablecoins. Specifically, it has surged by 11.6% over the past month, reaching a value of $2.61 billion. According to CCData’s latest report, this uptick can be attributed to the increased usage of Athena USDe as collateral for perpetual trading on Bybit.
BlackRock’s digitally tokenized fund, BUIDL, experienced a significant gain of 19.6%, reaching a total value of $448 million. This makes it the largest treasury fund currently available, outpacing Franklin Templeton’s BENJI. Importantly, each unit of BUIDL represents an ownership share in BlackRock’s US Institutional Digital Liquidity Fund.
The report brings attention to Circle’s USDC market capitalization growth for the sixth consecutive month, amounting to $32.6 billion in May. This expansion aligns with heightened demand, as USDC trading pairs set a new record for monthly volume in March. Furthermore, USDC’s market share by trading volume rose to 8.27% for the second consecutive month.
Moreover, there has been increased trading of Circle’s stablecoin, USDC, on the networks of Base and Solana. Approximately 9.29% of the total USDC supply is now located on Base, while 7.78% can be found on Solana.
Stablecoin Market’s Recovery Amid Regulation Uncertainty
The report brings to light the rebound in the stablecoin market after setbacks caused by the failure of the Terra Luna system and the depeg of the TerraClassicUSD algorithmic stablecoin (USTC), marking an seventeen-month long trend.
As a researcher studying the cryptocurrency market, I’ve come across information indicating potential changes regarding Tether (USDT) pairs on exchanges like Kraken due to impending MiCA regulations. There have been worries about USDT’s compliance with these new rules, but Kraken has reassured the public that there are currently no plans underway to remove USDT from their platform.
European exchanges such as OKX have expressed plans to eliminate USDT trading pairs due to the MiCA regulations, which impose transaction limitations of up to €200 million.
Regarding Central Bank Digital Currencies (CBDCs), the report highlighted that despite the US House passing legislation preventing the Federal Reserve from introducing CBDCs, Brazil’s DREX digital currency experiment was delayed until 2025 due to privacy issues. Meanwhile, Nigeria’s implementation of e-Naira CBDC has seen minimal growth since its October 2021 debut, with only slight transaction volume enhancements.
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2024-05-30 23:36