The Current State of Stablecoins
Stablecoins, a sector of the crypto market, have not experienced the same rally as other cryptocurrencies like bitcoin. According to a report by Fitch, the volumes and market capitalization of stablecoins have decreased. The total supply of stablecoins has gone from $138 billion to $124 billion since the beginning of the year. However, Tether’s USDT has gained market share since the de-pegging event of USDC in March.
Key Points:
– Stablecoins have not benefitted from the recent crypto market rally.
– The total supply of stablecoins has declined from $138 billion to $124 billion.
– Tether’s USDT has gained market share.
– The trading volumes of the top ten stablecoins have decreased from $53 billion to $28 billion.
– Stablecoins are backed by a variety of assets with different liquidity profiles.
Fitch also notes that the liquidity of the assets backing stablecoins has improved. For example, USDT’s reserve portfolio now includes a higher portion of treasury bills and repos. Binance has also improved the liquidity position of its stablecoins by overcollateralizing them with long-term US treasury securities.
Hot Take:
While stablecoins have not experienced the same rally as other cryptocurrencies, Tether’s USDT has managed to gain market share. The decrease in trading volumes of stablecoins suggests a potential shift in investor sentiment. However, the improved liquidity of the assets backing stablecoins indicates a more secure and stable foundation for these digital currencies. It will be interesting to see how the stablecoin market develops in the future.
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