The Decline of Stablecoins: GUSD, USDP, and MIM’s Plummeting Supplies
In recent years, the stablecoin market has faced significant challenges, especially since 2022 when Terra’s stablecoin collapsed. Paxos also encountered regulatory issues in 2023, resulting in the cessation of BUSD issuance. Furthermore, the supplies of GUSD, USDP, and MIM have drastically decreased in recent times. Gemini’s stablecoin, GUSD, has experienced a staggering 93% reduction in supply.
GUSD’s Market Capitalization Tumbles
At the close of June 2023, GUSD ranked as the ninth largest stablecoin by market capitalization. However, its market capitalization has plummeted to just $38.93 million, a 93.10% decline. This decline has caused GUSD to slip in the rankings, going from the ninth to the 24th largest stablecoin.
USDP Witnesses a Decrease in Market Cap
Paxos’ stablecoin, USDP, has also experienced a decrease in market capitalization. Although it remains the ninth largest stablecoin, its market cap has shrunk by 63% to $369 million.
MIM’s Demotion in the Stablecoin Hierarchy
MIM, the stablecoin created by Abracadabra Money, has fallen from its position as the sixth largest stablecoin to the 21st spot. Its market valuation has decreased from $2.81 billion in April 2022 to $51 million.
The Uncertain Future of Stablecoins
The decline of GUSD, USDP, and MIM raises questions about the stability of the stablecoin market. Following the collapse of Terra’s UST and incidents involving USDC, the future of stablecoins is uncertain. While there is cautious optimism, no one can predict what lies ahead for stablecoins.
Hot Take: The Decline of Stablecoins Signals Market Instability
As major stablecoins like GUSD, USDP, and MIM experience significant decreases in supply and market capitalization, it becomes evident that the stablecoin market is facing instability and challenges. These declines raise concerns about the long-term viability and widespread adoption of stablecoins. While the future remains uncertain, it is clear that the stability of stablecoins is essential for their success and the overall crypto market. The industry must address regulatory issues, enhance liquidity, and build trust to ensure the resilience and growth of stablecoins in the face of changing market dynamics.
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