While the market cap of various stablecoins declined, Tether emerged as a leader in stablecoin markets.
The financial world of cryptocurrency has witnessed a considerable downturn in stablecoin markets. After a steady decrease over 16 consecutive months, the market cap of stablecoins has plunged to a low not seen since August 2021.
On July 20th, CCData, the cryptocurrency analytics platform, reported a 0.82% fall in the stablecoin market cap from the beginning of the month until July 17th. Consequently, the overall market cap of the sector fell to $127 billion.
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The market dominance of stablecoins has also observed a mild downward trend, slipping from 10.5% in June to 10.3% in July.
In this landscape of declining figures, Pax Dollar (USDP) market cap emerged as the most severely hit among the top ten stablecoins, with a steep fall of 43.1% in July. Notably, this represents its lowest figure since December 2020.
According to CCData, the dramatic fall can be traced back to a strategic decision by MakerDAO. This decentralized autonomous organization opted to eliminate $500 million of USDP from its reserves.
Despite the overall downward trajectory, the market cap of Tether (USDT) struck a record high of $83.8 billion as of July 17th. This propelled its dominance in the stablecoin market cap to an impressive 65.9%.
Simultaneously, two other leading stablecoins, USD Coin (USDC) and Binance USD (BUSD), underwent a reduction in their market caps by 3.01% and 4.57%, dropping to $26.9 billion and $3.96 billion, respectively.
Particularly for USDC, it is the seventh straight month of diminishing market cap, a low not observed since June 2021.
Despite these recurrent declines, stablecoin trading volumes have bucked the trend, marking an increase of 16.6% to about $483 billion in June. This represents the first monthly increase since March.
As per CCData, this surge can be attributed to the recent lawsuits against Binance and Coinbase by the Securities and Exchange Commission (SEC) and the surge in spot Bitcoin (BTC) exchange-traded fund filings.
In contrast to the overall trend, the decentralized stablecoin market, comprising Dai (DAI), Frax (FRAX), and USDD (USDD), experienced an increase in its market cap by 0.43% to $7.52 billion in July. However, this figure still lags far behind its peak of $34.3 billion in April, being 78.1% lower.
In other stablecoin-related news, Aave Protocol has recently launched its algorithmic stablecoin GHO on the Ethereum mainnet.
