The stablecoin economy, a crucial component of the crypto market, has experienced a significant decline of $7.3 billion in value during the course of 2023. This contraction comes amidst the broader growth of the crypto economy, which has seen a surge of 41.77% since the beginning of the year, reaching a total market capitalization of $1.17 trillion.
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Data reveals that the stablecoin economy started the year with a valuation of $138.12 billion on January 6. However, as of today, it has shrunk to $130.79 billion, reflecting a substantial loss in a span of 140 days. Notably, prominent stablecoin projects like USDC and BUSD have faced significant redemptions, with USDC alone witnessing a decline of over $14 billion. Similarly, BUSD suffered redemptions exceeding $11 billion since early January, while DAI faced redemptions amounting to $361 million.
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| Top eight stablecoins by market capitalization on May 21, 2023 |
In contrast to these losses, some stablecoin projects have managed to offset the overall decline with growth. TUSD, for example, started the year with a market capitalization of approximately $846.57 million and has now reached a valuation of $2.04 billion, indicating an impressive growth rate of 140.97%.
Another stablecoin, tether (USDT), experienced a notable increase in its market cap. Starting at $66.29 billion in early January, USDT has since surged by over 25% to reach $82.95 billion. However, the overall 24-hour trade volume of the stablecoin market has decreased significantly, standing at $10.77 billion on May 21, 2023, compared to $27.11 billion at the beginning of the year.
Despite the reduced volume, stablecoin trades still account for a significant portion, representing 57.9% of the total 24-hour trading volume within the entire crypto economy. On January 6, 2023, when the stablecoin volume was $27.11 billion, it accounted for 81.36% of the day's global trade volume across the numerous listed crypto assets at that time.
The fluctuating performance of stablecoins highlights the dynamic nature of the crypto market, with some stablecoin projects facing redemptions while others experience growth. As the market evolves, the stability and influence of stablecoins will continue to be closely monitored by investors and industry observers alike.
