Move aside Bitcoin (BTC), stablecoins are holding the spotlight. Crypto research outlets Arcane Research and CryptoRank confirm that the stablecoin supply has hit the milestone amount of $180 billion.
The growth in stablecoins continues to outpace the rest of the market, up 6% in the past 30 days. In times of market volatility, stablecoins can offer price stability, backed by specific assets or algorithms.
Over the month of February, three stablecoins entered the top 10 coins by market capitalization as Binance USD (BUSD) briefly entered. According to Arcane Research, the three largest stablecoins, Tether (USDT), USD Coin (USDC) and BUSD now account for a total of “9% of the total crypto market cap.”
Plus, while volatility reigns proud, the stablecoin supply has grown by $9.5 billion over the past 30 days. Arcane Research stated that while the largest stablecoin, at 44% market share, USDT has stagnated over the course of last year, and USDC is notching it up a gear with “20% growth in 2022.”
“If USDC and USDT continue growing at similar rates as so far in 2022, USDC will become the largest stablecoin by market cap at the end of June.”
There was more good news for Tether, the largest stablecoin by market capitalization this morning. An industry bugbear, Tether FUD was a destructive narrative for the crypto industry in 2021, but the USDT trajectory now seems to be on the up.
In its latest reserves attestation, the company had reduced its exposure to commercial paper by 21%. Plus, the report stated that Tether’s “consolidated assets exceed its consolidated liabilities.”
While most cryptocurrency advocates may wonder what is the importance of stablecoins, their use cases are growing particularly in the developing world. Plus, for investors, stablecoin dominance is an interesting metric, as noted here:
Noticed something interesting.
Historically when tether dominance reaches 4.5% to 5% it marks a bottom on $BTC.
Seems like sentiment reaches peak fear around that level. pic.twitter.com/4RnHOTMEts— Byzantine General (@ByzGeneral) February 21, 2022
With the total supply of stablecoins hitting new all-time highs, traders hope that $39,600 does not pose heavy resistance.