With the euro performing similarly to Bitcoin (BTC) against the dollar since the start of the year, euro stablecoins are taking off. Let’s take a closer look at this growth.
Are euro stablecoins benefiting from the fall of the dollar?
Since the beginning of the year, the EUR/USD pair has soared by more than 13%, as the dollar falls to levels not seen since early fall 2021. At the time of writing, 1 euro is worth 1.17 dollars, whereas we were at near parity in January:
To put this performance into perspective, in dollar terms, buying euros would have yielded almost as much since the beginning of the year as buying Bitcoin (BTC). This is because Bitcoin has risen by 14.6% since January 1, which is more or less the same performance.
In this context, the adoption of euro stablecoins has skyrocketed by nearly 56% over the period studied. Indeed, the cumulative capitalization of the various assets in this category has risen from less than $310 million to more than $480 million:
However, these are euro stablecoins, and it would therefore be more appropriate to analyze the data in their underlying currency so as not to distort the results when analyzing their evolution.
Having grown from just under €300 million to over €410 million, this asset class has therefore recorded growth of nearly 38%.
However, this statistic is an average, and not all euro stablecoins are in the same boat. For example, while Circle’s EURC grew by 112%, SG Forge’s EURCV gained only 5%.
To determine whether there is a real correlation between the EUR/USD exchange rate and the surge in the adoption of euro stablecoins, we will need to perform the reverse analysis when the euro falls against the dollar.
Nevertheless, it should be noted that these famous euro stablecoins are still relatively undercapitalized, which may skew the results. To date, this asset class is worth nearly 530 times less than dollar-backed stablecoins.
