Yahya 
After 11 straight months of growth, the stablecoin market capitalization has hit an unheard-of $168 billion, a new all-time high. DefiLlama data shows that this milestone exceeds the last top of $167 billion reached in March 2022, therefore highlighting a strong comeback and continuous progress in the stablecoin industry.
Focusing only on those linked to external assets like fiat currency or gold, the data excludes algorithmic stablecoins. Previously reaching its peak in March 2022, the stablecoin market had a notable fall and dropped to $135 billion by the end of that year.
Known as “Dynamo DeFi,” crypto expert Patrick Scott remarked on the recent increase saying, “New money is entering crypto.” He underlined that, excluding algorithmic stablecoins, the whole stablecoin market capitalization currently exceeds its former peak from early 2022. Scott said that retail investment has been present for at least eight months, suggesting a more general market recovery even if he refrained from guessing on the precise reason of this increase.
Tether (USDT) is driving the charge in this stablecoin comeback. With a market capitalization of $91.69 billion at beginning the year, Tether has steadily increased value throughout 2024 to reach a record $117 billion in August. With a market capitalization of nearly $34 billion, Circle USD (USDC) also enjoyed advances; while still behind its all-time high of $55.8 billion in June 2022, it is highest point this year.
Stablecoin trade volumes have dropped even with increasing market capitalization. Reducing activity on centralized exchanges helps to explain an 8.35% decline in trade volumes to $795 billion recorded in July by CCData. Particularly with relation to USDT, the paper also highlighted the MiCA rules of the European Union as a contributing cause to the declining stablecoin trading activity.
With the market’s trading volume now hovering slightly around $46 billion, CoinMarketCap indicates that this pattern of declining trade volumes has persisted into August. Although the general market value is rising, the drop in trading volumes begs issues regarding the future dynamics of the stablecoin market, particularly in areas influenced by new regulations.
You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.