While the cryptocurrency market appears to be entering a phase of decline, stablecoin volumes are skyrocketing. Let’s take a look at the various statistics specific to stablecoins to try to understand the current state of the market.
Are stablecoins benefiting from the decline in cryptocurrencies?
On Saturday, we looked back at the performance of Bitcoin (BTC), which missed its “Uptober” for the third time in its history. However, not all cryptocurrency sectors are in the same boat, starting with stablecoins, which achieved record volumes on Ethereum (ETH) during the month of October.
This asset class generated $2.82 billion in volume, representing a new all-time high (ATH) for the fourth consecutive month. In this case, USDC came out on top, accounting for 57.45% of that volume in October:
Despite these volumes, it is interesting to note that the capitalization of stablecoins has tended to stagnate in recent weeks. For USDT, for example, this capitalization has plateaued at around $183 billion for the past ten days. With regard to USDC, we have also observed that the growth in capitalization has slowed since last month:
For now, Circle and Tether remain the top revenue-generating applications, according to data from DefiLlama:
Echoing the volumes mentioned above, this dominance can also be seen in Ethereum’s on-chain data, with USDT and USDC smart contracts ranking as the 2nd and 5th most gas-consuming smart contracts over the last 24 hours. Over 24 hours, this represents 11.28% of the gas spent on Ethereum, or 38.63 ETH.
However, with regard to the transactions generated by these same smart contracts, we can note that while USDC is close to its ATH, with more than 133,000 transactions generated on Monday, USDT has not yet surpassed its record of June 23, 2020, which was 316,442 transactions:
With November just beginning, the analysis can be repeated at the end of the month to see how the trend is evolving. Beyond all the factors driving adoption, whether in terms of US regulation or initiatives by traditional financial players, market conditions can also be put into perspective.
And for good reason: despite a new ATH in early October, the price of BTC now seems to be entering a phase of uncertainty, and profit-taking may have fueled volumes on stablecoins. When the cryptocurrency market is unsure which direction to take, investors may turn to these stablecoins to generate other forms of returns, particularly through lending.
