USDT reaches an unprecedented $90 billion peak, overcoming regulatory challenges.
Tether (USDT), the largest stablecoin globally, has seen consistent growth in its market capitalization. It reached a record high of $90 billion on December 6th, slightly retracting to $89.9 billion.
This surge indicates renewed confidence in the crypto market despite regulatory challenges. Over the past month, the market cap rose by approximately 6%, resulting in a year-to-date growth of over 35%, starting from $66.24 billion.
This demonstrates Tether’s ability to navigate market fluctuations and instill trust among investors. The increased market cap also reflects improved liquidity, with additional capital flowing into the ecosystem.
The Status of Stablecoins
After notable events like the Luna collapse in June 2022 and the Silicon Valley Bank (SVB) crisis in March, there was a notable decline in the total supply of stablecoins, reflecting diminished market confidence.
Nevertheless, starting from October 2023, there has been a continuous rise in the overall stablecoin supply, pointing towards a positive trend. This increase is seen as an early sign of improved on-chain liquidity, hinting at a situation where a greater amount of capital is available for deployment, as highlighted in the latest CoinMetrics report.
USDC, a prominent stablecoin in decentralized finance (DeFi) applications, saw a significant portion of its supply residing in smart contracts, peaking at over $20 billion in March 2022.
However, throughout the year, this amount decreased by half, dropping from its peak of $14 billion in March to $7 billion by December 2023.
In contrast, Tether on Ethereum, primarily held in externally owned accounts (EOAs), followed a different trajectory. Its involvement in smart contracts expanded, growing from $4 billion at the beginning of the year to surpass $6 billion.
The report also noted a decline in the number of addresses holding over $100k USDC, totaling 13k addresses, while those for USDT on Ethereum remained relatively stable.
Conversely, Tether on the Tron network experienced steady growth in adoption, with nearly 40k addresses holding over $100k. This trend is attributed to lower transaction fees and potential increased usage in developing economies across Latin America, Africa, and Asia.
Get free access to our lifetime VIP membership. Join us here.
Leave a Reply