Outside Source
The stablecoin market has recovered significantly from its plunge in the last two years due to the bear market, recording substantial volumes and activity since October 2023.
According to a tweet by crypto market intelligence platform IntoTheBlock, the stablecoin market capitalization is currently at $160 billion, and it is steadily aiming for the all-time high of $188 billion recorded during the peak of the last bull cycle.
Stablecoin Market Cap Recovers
IntoTheBlock considers the growth in the stablecoin market cap a bullish occurrence, and as such, it supports the sustainability of the decentralized finance ecosystem. Stablecoins play a major role in decentralized finance because they are the backbone for many blockchains and protocols.
The market intelligence platform said a high stablecoin market cap deepens liquidity within the crypto space, facilitating more efficient market operations. Stablecoins also support inflows of new capital into the crypto market because investors use them as entry points for fiat currencies. In fact, a rising stablecoin market cap indicates capital inflows into the market, which usually occur during rallies and bull seasons.
The United States spot Bitcoin exchange-traded funds (ETFs) industry has played a significant role in the rise of the stablecoin market cap this year. Institutional investors and traditional finance giants increased their stablecoin holdings to tap into the ETF landscape.
Tether Maintains Dominance
Zooming into the stablecoin space, several assets have recorded significant growth separately. Tether (USDT), which has the largest market share and is considered the king of stablecoins, now has a market cap of more than $100 billion, a feat the asset achieved in early March.
Tether’s closest rival, Circle (USDC), follows suit with a market cap of $33.9 billion. Notably, the market share of USDC declined last year after the stablecoin’s issuer, Circle, announced it was affected by the U.S. banking crisis at the time.
Crypto firms have also recently introduced new stablecoins into the market. Ethena’s synthetic dollar, USDe, was launched in March and has garnered a market cap of $2.3 billion since then. Online payments giant PayPal launched PYUSD in August 2023, and the stablecoin now has a market cap of more than $202 million. Crypto solutions provider Ripple announced earlier this month that it would launch its stablecoin later this year.
This article first appeared at CryptoPotato
