The market capitalization of stablecoins has hit a new record, soaring to $168 billion after 11 months of steady growth. According to DefiLlama, this marks the highest level ever reached, surpassing the previous peak from Mar. 2022.
The data excludes algorithmic stablecoins, which use algorithms to maintain their value rather than tying it to assets like fiat money or gold. In Mar. 2022, the market hit an all-time high of $167 billion, but it fell sharply and dropped to $135 billion by the end of the year.
Crypto analyst Patrick Scott, also called “Dynamo DeFi,” shared on X on Aug. 26 that he believes this is a sign that “new money is flowing into crypto.”
He didn’t speculate on the cause of the rise but noted that retail has been active for at least eight months. Tether is at the forefront of stablecoins. Right after the new year began, USDT’s market cap was $91.69 billion.
Stablecoin market growth: Highlights and challenges
In 2024, the market has seen consistent monthly growth, with its value surpassing $117 billion for the first time in Aug. Furthermore, Circle’s USD Coin has enjoyed a good year, hitting a market cap of over $34 billion, its peak for 2024. However, this is still quite far from its record high of $55.8 billion in June. 2022.
According to a recent CCData report, traders reduced stablecoin trading volumes by 8.35%, bringing them down to $795 billion in July. Centralized exchanges saw less trading activity, leading to this drop.
The report also points out that the Markets in Crypto-Assets Regulation raised concerns about USDT’s future in Europe, further decreasing stablecoin trading during July. The trend has continued into August, with the market’s trading volume now just over $46 billion, according to CoinMarketCap.
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