Stablecoin Market Capitalization Jumps to $164 Billion, Highest Since Terra Collapse
The post Stablecoin Market Capitalization Jumps to $164 Billion, Highest Since Terra Collapse appeared on BitcoinEthereumNews.com.
The stablecoin ecosystem rose to over $164 billion this past week—the last time it did this was before the Terra ecosystem collapse, linked to the UST stablecoin. This spike in market cap implies growing interest in blockchain technology as users buy and trade assets and products, interact with DeFi protocols, and more. Stablecoins are assets that reference the value of other assets, including fiat currencies and precious metals. The value of the most popular stablecoins is tied to the US Dollar, with USDT (Tether) singlehandedly boasting a market cap of over $110 billion. Dollar-referenced stablecoins make it easy to exchange value and get into positions on-chain, lending the ease that the Dollar does. Moreover, they let users escape the volatility associated with other cryptos. Stablecoins are also popularly used for real-world payments and international remittances, as they are cheaper and quicker. Blockchain analytics platform Nansen to X to share the occurrence, “The total stablecoin market cap has finally started to break $160b after three months of remaining relatively flat, highlighting increasing demand and growing confidence in these assets.” Wintermute, a trading firm that released a report regarding the growing stablecoin interest, noted, “The increase in stablecoin supply indicates that money is being deposited into on-chain ecosystems to generate economic activity, either through direct on-chain purchases that can catalyze price appreciation or yield-generation strategies that could improve liquidity. This activity ultimately fosters positive on-chain growth.” Nevertheless, stablecoins are looked at unfairly by governments, evidenced by the numerous regulations hampering stablecoin adoption and usage worldwide. For instance, the EU’s Markets in Crypto Assets (MiCA) regulations have brought new enforcements to reduce reliance on Dollar-related stablecoins. Instead, it wants to boost ones that are Euro-referenced. However, that puts a stick in the spokes of popular stablecoins like USDT, USDC, and others, all referencing…
Filed under: News - @ July 27, 2024 8:20 am