CryptoCompare CryptoCompare’s First Stablecoin and CBDC Reportthe latest addition to CryptoCompare’s monthly survey series.
Since the launch of Tether in 2014, stablecoins have grown into an important subsector of the digital asset industry. Since then, the stablecoin sector has grown significantly in size and interest, reaching a peak of $188 billion on April 2, 2022.
However, recent developments surrounding stablecoins, such as the collateralization of Tether and the collapse of TerraUSD, have raised concerns from investors and regulators. Nevertheless, stablecoins are beginning to expand from the digital world of cryptocurrencies into the financial landscape as governments and organizations look at how to incorporate them into their traditional systems.
This report provides insight into the latest developments in the stablecoin and CBDC sector, focusing on market capitalization, trading volume, analysis related to stablecoins, type based on collateral, fixed asset type, etc. segmented for each.
You can access the report here.
Important points:
- In January, Tether (USDT) reached the highest stablecoin market share since October 2021. USDT, a popular stablecoin, gained 0.82% market share to $66.7 billion, increasing its market share to 48.7%. USD Coin, Binance USD, and Gemini Dollar are the only stablecoins to record market cap declines in January.
-
Stablecoin netflows reached their highest level since November 2021, with $3.65 billion leaving exchanges in December after concerns over Binance’s solvency surfaced earlier in the month.
-
The developers announced the shutdown of Waves’ NeutrinoUSD and Vader Protocol’s USDV after failing to restore Peg, the latest addition to the list of failed algorithmic stablecoins. Algorithmic stablecoins currently have a market share of 1.71%, down from a high of 12.4% in April 2022.
-
Stablecoin trading volume increased 9.46% to $397 billion in January, while spot trading volume increased 10.2% to $121 billion. As a result, he climbed to 23.4% from 23.1% in December, marking his fourth straight rise after hitting an all-time low of 21.1% in October.
-
Concerns about the solvency of Huobi, a centralized exchange partly owned by Justin Sun, have coincided with the depegment of stablecoins in the Tron ecosystem. USDD, an overcollateralized stablecoin backed by TRX, BTC, USDT and USDC, fell to his low of $0.973 and USDJ to his high of $1.126 in January.
Download report
Total stablecoin market capitalization declines for 10th straight month
Stablecoin market cap fell 0.62% in January to $137 billion, the lowest stablecoin market cap since September 2021.
Monthly stablecoin trading volume as of January 22 has already surpassed December volume, up 9.46% to $397 billion, aided by a return in market volatility.
Top 3 Stablecoins Continue to Dominate Market Share
The top 10 stablecoins remain unchanged, and the only stablecoins to record market cap declines in January are USD Coin (USDC), Binance USD (BUSD), and Gemini Dollar (GUSD). USDT, USDC and BUSD currently account for his 91.8% of the total stablecoin market cap.
Tether (USDT) market cap rose 0.82% to $66.7 billion, increasing its market share to 48.7%. This is the best dominance on record since October 2021. $16.1 billion each.
Stablecoin outflows from centralized exchanges spiked in December
Centralized Exchanges See Largest Stablecoin Net Outflow Since November 2021 in December 2022 as Binance Solvency Rumors Lead to $3.65 Billion Net Outflow from All CEXs I was. Binance posted a record $13.1 billion net outflow in December after a discrepancy in the scope of its Proof of Reserves audit sparked liquidity concerns.
January data as of January 22 indicate that the current trend of users moving assets off exchanges is likely to continue, with CEX likely to record net outflows of $1.17 billion. is shown.
‘Stablecoin War’ Heats Up As Coinbase Encourages USDT To USDC Swaps
On December 8th, Coinbase announced the introduction of a zero-fee transaction to exchange USDT for USDC. The exchange, which partnered with Circle to co-found USDC, says stability and trust are the main drivers of stablecoin support. USDC now accounts for less than 1% of Coinbase’s stablecoin trading volume.
Exchanges seem to favor certain stablecoins, and as such encourage and sometimes force users to switch to their stablecoin of choice. For example, in early 2022 Binance introduced his BUSD automatic conversion feature. This feature automatically converted a user’s balance of USDC, USDP, and TrueUSD to his BUSD on a 1:1 basis, increasing liquidity and capital efficiency.
Download report
The information provided by this report does not constitute any form of advice or recommendation by CryptoCompare. Redistributions of charts displayed in this review must cite CryptoCompare as the sole provider and creator.
