Algorithmic stablecoin market share dropped by 10x from ATH: Report

Please fol­low and like us:
Pin Share

The noto­ri­ous fail­ure of the Ter­ra USD (UST) affect­ed the cryp­to mar­ket in gen­er­al, but it’s the algo­rith­mic sta­ble­coins alike that took the harsh­est punch. Since its peak in April 2022, the mar­ket share of algo­rith­mic sta­ble­coins shrank almost tenfold. 

Accord­ing to a fresh report from Cryp­to­Com­pare, the cur­rent mar­ket share of algo­rith­mic sta­ble­coins stands at 1.71%, while its all-time high record in April reached 12.4% of the whole cryp­to mar­ket. Pri­or to its crash, Ter­ra USD account­ed for 79.8% of all the algo­rith­mic stablecoin’s mar­ket share. 

The sta­ble­coin mar­ket in gen­er­al also doesn’t feel too well with Jan­u­ary becom­ing the tenth con­sec­u­tive month of decline in its cap­i­tal­iza­tion. The report puts this cap­i­tal­iza­tion at the rate of $137bn or 12.4% of the total cryp­to mar­ket. In Decem­ber 2022, cen­tral­ized exchanges saw a net out­flow of $3.65 bil­lion in sta­ble­coins — the largest since Novem­ber 2021. Accord­ing to CryptoCompare:

“The decline in sta­ble­coin dom­i­nance sug­gests mar­ket par­tic­i­pants are rotat­ing out of sta­ble­coins and into risk assets.”

Teth­er (USDT), USD Coin (USDC) and Binance USD (BUSD) remain the lead­ers in the sta­ble­coin mar­ket with the first one reach­ing 48.7% of the mar­ket share — the high­est dom­i­nance record­ed since Octo­ber 2021. 

Relat­ed: Sta­ble­coin data points to ‘healthy appetite’ from bulls and pos­si­ble Bit­coin ral­ly to $25K

The report also high­lights the so-called “Sta­ble­coin wars”, heat­ed up by Coinbase’s deci­sion to intro­duce a zero-fee trade to swap USDT for USDC in Decem­ber 2022. Mint­ed by the exchange, USDC cur­rent­ly accounts for less than 1% of the sta­ble­coins trad­ing vol­ume on Coin­base. Ear­li­er in 2022 Binance also intro­duced its BUSD auto-con­ver­sion fea­ture, which auto­mat­i­cal­ly con­vert­ed users’ bal­ances of USDC, USDP and TrueUSD to BUSD on a 1:1 basis. 

In late Jan­u­ary, the CEO of cred­it card giant Visa, Al Kel­ly, express­es his belief that, along with the cen­tral bank dig­i­tal cur­ren­cies (CBD­Cs), sta­ble­coins have the poten­tial to play a mean­ing­ful role in the pay­ments space.

Source link

Please fol­low and like us:
Pin Share

Leave a Reply

Your email address will not be published. Required fields are marked *