Stablecoin Market Cap Dominance Hits Lowest Point in a Year
The dominance of stablecoins in the cryptocurrency market fell to its lowest level since December 2021, reaching only 8.07% in December. This decline occurred despite stablecoins adding the largest monthly supply since February 2022.
A Research report by CCData revealed that the total market capitalization of stablecoins increased by 3.43% to $128 billion in November. The upward trend is expected to continue, with the market cap already surpassing $129 billion as of December 18.
USDT Market Cap Breaks Record, Crossing $90 Billion
In December, the market capitalization of USDT reached an all-time high of $90.8 billion. This milestone makes USDT the first stablecoin to surpass the $90 billion mark in market capitalization. It also marks the fourth consecutive month of growth for USDT’s market cap.
The dominance of USDT among the top 10 stablecoins is currently at 70.2%, the highest level since January 2021. Additionally, trading volume for USDT pairs on centralized exchanges reached $662 billion in November, the highest level since March 2023.
FDUSD Emerges as a Strong Contender
The standout stablecoin for December was First Digital USD (FDUSD), which experienced a remarkable increase in market capitalization. FDUSD’s market cap rose by 92.6% to reach $1.63 billion, setting a new all-time high for the stablecoin.
This surge allowed FDUSD to replace Binance USD (BUSD) as the fifth largest stablecoin, trailing behind USDT, USDC, Dai, and TrueUSD.
Binance Ends Support for BUSD
Binance recently announced that it will no longer support its stablecoin, Binance USD (BUSD). BUSD had been experiencing a decline in market cap for 13 consecutive months and reached $1.47 billion in December.
Once responsible for nearly 36.4% of trading volumes on Binance, BUSD has gradually been phased out and replaced by TrueUSD and First Digital USD since receiving a Wells Notice from the US SEC in February.
Hot Take: Stablecoin Dominance Declines Despite Record Monthly Supply
The stablecoin market has witnessed a decline in dominance, reaching its lowest point since December 2021. This drop comes as a surprise considering the addition of the largest monthly supply since February 2022. However, USDT continues to thrive, breaking records with a market capitalization exceeding $90 billion. The rise of FDUSD also highlights the dynamic nature of the stablecoin market. As Binance ends support for BUSD, other stablecoins are seizing opportunities to climb the ranks. These developments indicate that the stablecoin landscape is constantly evolving, and investors should keep a close eye on emerging trends.
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