The fever for tether and ‘stablecoins’, which lose share in cryptocurrencies, drop

The boom experienced by the ‘stablecoins’ this summer, when the three main ones came to accumulate 115,000 million dollars of capitalization, of the total 1.5 trillion that the market added at the end of July, has moderated in the last month and a half . The tether, the USD coin and the binance USD are now worth 110,000 million out of a market of about $ 2.2 trillion, which is a notable loss of share in crypto, according to data from CoinMarketCap and Best Bets.

The numerous concerns about the financial stability of the tether, which has continued to grow to accumulate 68,000 million, compared to 60,000 a month and a half ago, and the fears that these tokens backed by the US dollar and with a 1: 1 exchange plan about a bankruptcy, have made them less attractive in the face of investors in favor of other ‘altcoins’ and for that reason they have decoupled from the growth of the market.

Still, according to data presented by Best Bets, the combined capitalization of tether, USD Coin and binance USD, as the world’s top three stablecoins, has more than tripled since early 2021. Specifically, the largest of them all has experienced a 158% increase so far this year, going from 26.5 billion dollars in January to 68.3 billion this week, and it is placed in the fifth position in the ranking of cryptocurrencies by market value.

Unlike other cryptocurrencies, so-called stablecoins are relatively less volatile and its value is determined differently. For example, the price of bitcoin mainly depends on supply and demand, that is, how many coins are mined and how many investors want to buy the cryptocurrency. On the other hand, ‘stablecoins’ are connected to the price of a totally different asset.

Tether’s USDT, for example, is connected to the evolution of the price of the US dollar. If the US dollar falls in the forex market, so does the USDT. Also, being the most traded cryptocurrency in the world, tether saw its trading volume increase by 35% last month. In July, the most widely used stablecoin reached $ 1.48 trillion in monthly trading volume. Statistics show that this figure surpassed $ 2 trillion in August.

Although it lags far behind tether as a leader in stablecoins, USD coin has seen much more significant market capitalization growth this year. Statistics show that increased almost 400% in the last nine months, reaching $ 29.2 billion this week.

On the other hand, the market capitalization of the USD binance in dollars skyrocketed 742% throughout the year, the largest increase among the top three stablecoins.

Even so, this figure is almost two times lower compared to the growth of the USD binance this year. In January, the combined value of all Binance USD coins stood at $ 1.48 billion, which is almost 18 times less than the leading tether. However, this figure has soared to $ 12.5 billion, showing an impressive 742% growth so far this year.

Las stablecoins son essential for two areas of digital payments seeking to escape volatility. One of them is the market for decentralized finance or DeFi, which relies on cryptocurrencies for payments and loans.

In addition, they are considered the inspiration of the so-called CBDC or digital currencies of central banks, such as the Chinese currency e-CNY or the digital euro, a form of electronic money issued by the Eurosystem.

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The fever for tether and ‘stablecoins’, which lose share in cryptocurrencies, drop

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