Crypto: Gemini’s GUSD Stablecoin Sees Market Capitalization Plummet
In the competitive world of cryptocurrencies, smaller coins like Gemini’s USD-backed stablecoin GUSD are struggling to gain traction. GUSD has experienced a significant drop in market capitalization, losing 93% since July 2023. While its peg to the dollar remains intact, the overall use of GUSD is diminishing, indicating a trend towards centralization in the crypto market.
Gemini’s GUSD: A Total Flop
Once ranked as the ninth largest stablecoin with a market capitalization of $564 million, GUSD has now fallen to 28th place. Its market capitalization has evaporated by 93%, leaving it with a value of only $38.93 million. In terms of total cryptographic assets listed on Coingecko, GUSD ranks 667th out of 12,000. Compared to giants like Tether (USDT), GUSD represents just 0.0423% of the market.
Reasons Behind GUSD’s Decline
The collapse of Gemini’s crypto can be attributed to low utilization and lack of investor confidence. Unlike other stablecoins that have multichain versions, GUSD is only available on the Ethereum blockchain. Additionally, many users have been redeeming their GUSD, reducing its supply in the market.
Performance of Other Stablecoins
In contrast to GUSD, Tether (USDT) has seen significant growth in market capitalization, adding $25.5 billion throughout 2023. USDT reached a new all-time high in circulating supply in May last year. Another stablecoin, USDC, currently has a market capitalization of about $25 billion and is widely used in the DeFi sector. However, it has also lost a significant portion of its market capitalization.
Failures in the Stablecoin Market
Pax Dollar (USDP) and Magic Internet Money (MIM) are two examples of stablecoins that have seen their market capitalization decline. USDP went from $1 billion to $369 million, while MIM dropped from $4.6 billion to $50 million.
Hot Take: The Challenges Faced by Stablecoins
The decline in market capitalization for Gemini’s GUSD highlights the challenges faced by stablecoins in the highly competitive crypto market. While some stablecoins like Tether have managed to grow and increase their presence, others have struggled to maintain their value. The limited use cases and lack of investor confidence have contributed to the decline of certain stablecoins. As the market continues to evolve, only a few stablecoins will survive and thrive.
By
By
By
