Turbulent Times Ahead? Stablecoin Valuations and Trade Volumes Fluctuate
The stablecoin landscape has seen little growth over the past two months, with a total value of just over $123 billion as we enter the third week of October. While there was a spike in trading of fiat-pegged tokens on October 13, stablecoin transactions accounted for only 22.96% of the global crypto economy’s trade volume. Just one day earlier, they made up 74% of all trades.
Challenges in the Market: Changes in Stablecoin Supply
During the last month, the market for fiat-pegged tokens has been turbulent. Tether (USDT) experienced a slight increase in supply by 0.5%, while usd coin (USDC) saw a decrease of 4.3% in its stockpile. DAI, the third-largest stablecoin by market cap, had 1.3% of its supply reduced, while trueusd (TUSD) enjoyed a 6.5% uptick. BUSD, ranked fifth, experienced a significant reduction of 15.5% in its supply.
Fluctuations in Market Capitalization and Circulation
The market capitalization of BUSD is currently around $2.13 billion and is at risk of falling below $2 billion. Tron’s USDD remained unchanged over the past month, while FRAX saw a slight growth of 0.5%. Pax dollar (USDP) faced a decline of 7.2% in its supply, while first digital usd (FDUSD), a newcomer to the stablecoin market, witnessed an increase of 18.7%. As of October 13, Paypal’s stablecoin ranks as the 13th largest with a circulation of 119 million.
Changes in Stablecoin Trade Volume
On the morning of October 13, stablecoins accounted for 22.96% of the $62 billion global trade volume, a significant drop from the previous day’s 74%. The stablecoin economy briefly dipped below the $123 billion mark on Thursday evening, with the global trade volume falling to $34.13 billion. Additionally, Tether announced a leadership shift this week, with Paolo Ardoino taking over as CEO in December.
USDR and Loss of Parity
This week, USDR, an obscure stablecoin managed by Tangibledao, experienced a loss of parity and is now trading at half its former $1 value. Despite promises from the team to address the issue, their post on social media platform X remains private, preventing public responses. USDR joins the growing list of fiat-pegged tokens that have lost their dollar pegs.
Hot Take: Stablecoin Market Faces Volatility and Uncertainty
The stablecoin market has been characterized by fluctuations in valuations, trade volumes, and supply over the past month. While some stablecoins have seen slight growth or reduction in supply, others have experienced more significant changes. The trade volume of stablecoins has also varied significantly, with a sharp drop observed on October 13. The loss of parity in USDR highlights the risks associated with lesser-known stablecoins. As the market continues to evolve, it remains uncertain how stablecoins will fare in terms of stability and adoption.
Benito Cormi, the brilliant crypto analyst who has made waves in the world of cryptocurrency. With his razor-sharp analytical skills and deep understanding of the digital asset landscape, Benito has become a trusted figure in the industry and remains at the forefront, tirelessly researching and analyzing market trends to help individuals and businesses make informed decisions in this dynamic landscape.