Stablecoins have become the salvation for those who feared the unstable nature of cryptocurrencies. While the market cap of stablecoins has been essentially expanding, the trading volume of these has dropped throughout quarter 2 of 2020.
The Top Five Stablecoins Account For 48.3% Of The Market Cap.
The crypto industry has accumulated tremendous footing as well as adoption over the years. People worldwide have been investing or venturing into the crypto world in large numbers. However, some remain cynical about entering the market citing the uncertain nature of cryptocurrencies. Stablecoins came as a ray of light to those who were worried about the extreme instability of cryptocurrencies.
Stabelcoins have become hugely popular over time. CoinGecko’s recent report investigates the developments of stablecoins during quarter 2 of 2020. According to the report, the top five stabelcoins including, Paxos Standard Token (PAX), USD Coin (USDC), Tether (USDT), Binance USD (BUSD) as well as TrueUSD (TUSD) represents 3.65 billion USD of the market cap. This was reportedly a 48.3% increase since quarter 1. This growth was mainly fueled by the biggest stablecoin, USDT as it recorded a 54% increase with an addition of 3.38 billion USD.
USDC wasn’t too far behind as it saw a 293 million USD addition which was a 42% increase from the previous quarter.
Despite the fact that the market cap of stablecoins has surged considerably, the trading volume of these coins has dropped. The report went on to explain the possible cause of this and stated,
“This may be a result of investors seeking safe-haven and using stablecoins for non-trading related activities such as staking/DeFi.”
This was similar to other cryptocurrencies as well. Nearly 73% of Bitcoins in circulation were dormant since 2019. This attitude suggests that these HODL-ers were sitting tight for an immunent bull run.
Stablecoins had apparently also seen a stable movement throughout the first two months of quarter 2. However, late in May, as the price of Bitcoin saw stability, the momentum of the stablecoins dropped. This is also considered to be an indication of a HODL-ing period instead of trading.
Tether Is The Big Winner.
USDT is the biggest stablecoin in the crypto world. The coin even eclipsed leading cryptocurrency Ripple (XRP) and replaced it as the third-biggest crypto coin. Stablecoin’s market cap is nearly hitting 10 billion USD. Currently, the market cap of USDT is 9.2 billion USD.
Additionally, the report advised that the circulation of the stablecoin had increased by 100% from 4.7 billion to 9.6 billion in the first half of 2020.
