Victor Ugochukwu · Dec 14, 2020 . 5min read
Stablecoins supply shoot past $20 billion
The market cap of stablecoins is $21 billion with an average weekly volume of almost $38 billion and 87% of this volume is controlled by two stablecoins.
By Victor Ugochukwu · Oct 17, 2020 . 6min read
The year 2020 can be tagged many things in the crypto industry from DeFi to Bitcoin. However, one thing has continuously been on the rise this year, and that is stablecoins supply. As of press time, the total supply of stablecoins has crossed $21.2 billion.
According to data from Santiment Data, the market cap of stablecoins is $ 21,287,806,939, with an average weekly volume of almost $38 billion. And two of the largest stablecoins Tether and USDC control about 87% of this supply.
Specifically, Tether has a market cap of $15.8 billion while Circle’s USDC is well on its way to $3 billion, currently at $2.7 billion. Providing contexts to the phenomenal growth, stablecoins have grown by at least 150% year-to-date. The year started with the stablecoin’s supply at around $5 billion, which then started proliferating since March during the wake of the coronavirus market crash.
Another impetus to stablecoins growth this year has been the sharp spike in DeFi activities. Most DeFi protocols afford users to lock-in their assets (most especially stablecoins) to earn yields. In fact, Curve Finance platform is dubbed “the Uniswap of Stablecoins” because it allows for extremely low slippage.
Derivatives market activities have also largely contributed to the uptick we see today in stablecoins. Except for BitMEX, most derivatives exchange requires traders to deposit their assets in stablecoins.
Stablecoin supply projections for the coming years
Some bold predictions are already flying around in regard to the stablecoin supply from now to the next five years. Regulations are already gearing forward to ensure this could happen from FATF to OCC’s recent clarity on banks now sanctioned to bear custody for stablecoins reserves. For instance, Lou Kerner, founder of Justable.com in his trillion-dollar stablecoins predictions for 2025 said algorithmically backed stablecoins help to lock up some percentage of M2 supply. This invariably could help drive stablecoin market cap to trillion dollars.
Experts are also predicting that Tether may well be prepping to overtake Ethereum in market cap by next year. Mike McGlone of Bloomberg Crypto shared his opinion on this, citing Ethereum’s stable growth. When compared with Stablecoins, it becomes even more apparent. Especially Tether moving from $4.1 billion to $15.8 billion from January to date, there’s a possibility of overtaking Ethereum.
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