While the cryptocurrency market appears to be entering a pullback phase, stablecoin trading volumes are skyrocketing. Let’s take a look at the key statistics to try to understand the current state of the market.
Are Stablecoins Benefiting from the Cryptocurrency Downturn?
On Saturday, we reviewed Bitcoin’s (BTC) performance, which missed its “Uptober” for the third time in history. Nevertheless, not all sectors of the cryptocurrency market are in the same boat, starting with stablecoins, which achieved record trading volumes on Ethereum (ETH) during the month of October.
In fact, this asset class generated 2.82 billion in trading volume, marking a new all-time high (ATH) for the fourth consecutive month. In this case, USDC leads the pack, accounting for 57.45% of that volume in October:
Stablecoin volumes on Ethereum
Despite these volumes, it is worth noting that stablecoin market capitalization has tended to stagnate in recent weeks. For USDT, for example, market capitalization has plateaued around $183 billion for the past ten days. Regarding USDC, we also observe that the growth in market capitalization has slowed since last month:
USDC market cap over 3 months
For now, however, Circle and Tether remain at the top of the list of applications generating the most revenue, according to data from DefiLlama:
Top revenue-generating applications
Echoing the volumes mentioned earlier, this dominance is also evident in Ethereum’s on-chain data, as over the past 24 hours, the USDT and USDC smart contracts ranked as the 2nd and 5th smart contracts, respectively, through which the most gas was spent. Over 24 hours, this represents 11.28% of the gas spent on Ethereum, or 38.63 ETH.
Regarding the transactions generated by these same smart contracts, we can note, however, that while the USDC contract is close to its ATH—with over 133,000 transactions generated on Monday—the USDT contract has not yet surpassed its record of 316,442 transactions set on June 23, 2020:
Daily transactions on the USDT smart contract
With November just beginning, the analysis can be repeated at the end of the month to see how the trend evolves. Beyond all adoption factors—whether related to U.S. regulation or initiatives by traditional finance 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 appears 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.
