The stablecoin market has reached a new milestone, with its total market capitalization hitting an all-time high of $168 billion. This achievement follows 11 consecutive months of growth, as shown by data from DefiLlama. The current potential exceeds the maximum of $167 billion recorded in March 2022, indicating a clear recovery and growth stage for stablecoins.
It is important to note that this data does not include a category often referred to as algorithmic stablecoins, where the value is not anchored to by some external reference, fiat money, gold, etc, but is maintained through computation. After hitting an all-time high in 2022, the market size began to shrink, with a total market cap of $135 billion by the end of that year. However, the current surge indicates that stablecoins are being promoted once again.
This development was pointed out by crypto analyst Patrick Scott popularly identified as Dynamo DeFi in a post on X which was formerly Twitter on the 26th of August. He pointed out that the fact that the market cap is on an upward trend may be an indication of new money flowing into the crypto space. While Scott did not offer guesses on the reasons behind the increase, he commented that retail investment started within the market for at least eight months suggesting that institutional investors may be involved in boosting the market.
USDT Hits $117 Billion While USDC Reaches $34 Billion in 2024
Tether (USDT) has been the most dominant in stablecoins. It recorded a market capitalization of over 117 billion US dollars in August 2024. This makes it increase gradually throughout the year from 91.69B which was recorded at the beginning of January. Similarly, Circle USD (USDC) has also soared and currently stands at a market capitalization of over $34 billion. However, this is still far from the highest market capitalization recorded in June 2022 at $55.8 billion.
This growth has been realized in the market capitalization of stablecoins while trading volumes have reduced. CCData reported in July a decrease in trading volumes to $795 billion, down 8.35% mainly due to low trading on CEXs and concerns with the new regulations in Europe. This decline in trading volume has persisted through August, with today’s figures hovering around $46 billion, as reported by CoinMarketCap.