{"id":122496,"date":"2023-07-14T14:59:57","date_gmt":"2023-07-14T14:59:57","guid":{"rendered":"https:\/\/dripp.zone\/news\/stablecoins-are-here-to-stay-but-lopsided-growth-wont-help-crypto-news\/"},"modified":"2023-07-14T15:00:00","modified_gmt":"2023-07-14T15:00:00","slug":"stablecoins-are-here-to-stay-but-lopsided-growth-wont-help-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/stablecoins-are-here-to-stay-but-lopsided-growth-wont-help-crypto-news\/","title":{"rendered":"Stablecoins are here to stay, but lopsided growth won&#8217;t help\n &#8211; Crypto News"},"content":{"rendered":"<p><\/p>\n<div>\n<p>\t\t\t\t\t\t<br style=\"clear: both; display: block; float: none;\"\/><\/p>\n<ul>\n<li><em>Nearly 75% of all transactions on centralized crypto exchanges involved a stablecoin.<\/em><\/li>\n<li><em>The lopsided growth sparked concerns about weaknesses in the broader ecosystem.<\/em><\/li>\n<\/ul>\n<p>Stablecoins have proven to be a popular tool in the Web3 domain over the past few years.  By combining the benefits of cryptocurrencies while maintaining a stable value, they have emerged as the holy grail for new-age financial investors.<\/p>\n<p>This unique ability has cemented stablecoins as the primary way for traders on non-fiat crypto exchanges to enter and exit trades, thereby acting as a bridge between traditional finance and crypto ecosystems.<\/p>\n<h4>Stablecoins increase their market share<\/h4>\n<p>according to a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/research.kaiko.com\/insights\/the-state-of-stablecoins\" data-wpel-link=\"external\">reports<\/a> by digital assets data provider Kaiko dated 13 July, nearly 75% of all transactions on centralized crypto exchanges (CEX) involved a stablecoin.<\/p>\n<p>Although significantly down from the all-time highs seen in March earlier this year, the market share of stablecoins has increased by a sizeable 10% since 2020.<\/p>\n<div id=\"attachment_327422\" style=\"width: 1284px\" class=\"wp-caption aligncenter\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stables.webp\" data-wpel-link=\"internal\"><noscript><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327422\" class=\"size-full wp-image-327422\" src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stables.webp\" alt=\"\" width=\"1274\" height=\"690\" srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stables.webp 1274w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stables-300x162.webp 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stables-1024x555.webp 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stables-768x416.webp 768w\" sizes=\"auto, (max-width: 1274px) 100vw, 1274px\"\/><\/noscript><\/a><\/p>\n<p id=\"caption-attachment-327422\" class=\"wp-caption-text\">Source: Kaiko<\/p>\n<\/div>\n<p>While the dominance of fiat currencies on CEXs was clearly waning, the primary driver behind the surge in stablecoin volumes was <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/bnb\" data-wpel-link=\"internal\">Binance&#8217;s [BNB]<\/a>  Zero-fee trading program introduced in July last year.  As many as 13 spot trading pairs of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/BITCOIN\" data-wpel-link=\"internal\">Bitcoin [BTC]<\/a>  were exempted from exchange fees.<\/p>\n<p>As per an earlier report by Kaiko, zero-fee trade volume accounted for nearly 66% of total volume.<\/p>\n<p>However, as evident in the graph above, as soon as this promotion ended in March 2023, there was a sharp decline in the overall trading volume, and consequently stablecoins&#8217; market share.<\/p>\n<p>Nevertheless, the crypto market&#8217;s rebound in 2023 has put the spotlight back on these stable assets.  The cumulative trade volume involving the big five \u2013 <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/tether\" data-wpel-link=\"internal\">Tether [USDT]<\/a>, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/USDC\" data-wpel-link=\"internal\">USDCoin [USDC]<\/a>, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/DAI\" data-wpel-link=\"internal\">dai<\/a>, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/?s=busd\" data-wpel-link=\"internal\">Binance USD [BUSD]<\/a>  and <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/TRUEUSD\" data-wpel-link=\"internal\">TrueUSD [TUSD]<\/a>in 2023 \u2013 was greater than $3 trillion, as per the report.<\/p>\n<h4>Asymmetrical growth a cause for worry?<\/h4>\n<p>The largest stablecoin by market cap, USDT, enjoyed a massive 70% market share.  While this mirrored USDT&#8217;s supremacy, the lopsided distribution highlighted concerns about the weaknesses in the broader stablecoin ecosystem.<\/p>\n<div id=\"attachment_327427\" style=\"width: 1308px\" class=\"wp-caption aligncenter\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance.webp\" data-wpel-link=\"internal\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327427\" class=\"size-full wp-image-327427\" src=\"data:image\/svg+xml,%3Csvg%20xmlns=\" http:=\"\" alt=\"\" width=\"1298\" height=\"698\" data-lazy-srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance.webp 1298w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance-300x161.webp 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance-1024x551.webp 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance-768x413.webp 768w\" data-lazy-sizes=\"(max-width: 1298px) 100vw, 1298px\" data-lazy-src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance.webp\"\/><noscript><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327427\" class=\"size-full wp-image-327427\" src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance.webp\" alt=\"\" width=\"1298\" height=\"698\" srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance.webp 1298w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance-300x161.webp 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance-1024x551.webp 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-dominance-768x413.webp 768w\" sizes=\"auto, (max-width: 1298px) 100vw, 1298px\"\/><\/noscript><\/a><\/p>\n<p id=\"caption-attachment-327427\" class=\"wp-caption-text\">Source: Kaiko<\/p>\n<\/div>\n<p>Incidents of depeggings and regulatory clampdowns have stunted the growth of other stablecoins in the market.<\/p>\n<p>Earlier in February, <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/?s=busd\" data-wpel-link=\"internal\">Binance USD [BUSD]<\/a>  depegged from its dollar value.  This happened following orders by a New York-based regulator, which instructed the issuing company Paxos to halt the minting of new tokens.  Since then, about 75% of BUSD&#8217;s market share has been wiped out as of this writing.<\/p>\n<p>This was followed by the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/silicon-valley-bank-leaves-usdc-bleeding-will-it-impact-stablecoin-market\/\" data-wpel-link=\"internal\">biggest depegging<\/a> of 2023 so far when <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/USDC\" data-wpel-link=\"internal\">USDCoin [USDC]<\/a>the second-largest stablecoin by market cap, dropped to a low of 87 cents from its ideal value of $1.<\/p>\n<p>The event caused mayhem in the market, severely impacting investors&#8217; portfolios.  USDC&#8217;s market cap has shrunk by 37% since this fiasco.<\/p>\n<p>Furthermore, the depeg resulted in a domino effect on the algorithmic stablecoin. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/DAI\" data-wpel-link=\"internal\">dai<\/a> as USDC formed the majority of its collateral reserves.  DAI lost nearly $2 billion of its market value.<\/p>\n<div id=\"attachment_327432\" style=\"width: 1810px\" class=\"wp-caption aligncenter\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1.png\" data-wpel-link=\"internal\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327432\" class=\"size-full wp-image-327432\" src=\"data:image\/svg+xml,%3Csvg%20xmlns=\" http:=\"\" alt=\"\" width=\"1800\" height=\"1013\" data-lazy-srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1.png 1800w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-300x169.png 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-1024x576.png 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-768x432.png 768w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-1536x864.png 1536w\" data-lazy-sizes=\"(max-width: 1800px) 100vw, 1800px\" data-lazy-src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1.png\"\/><noscript><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327432\" class=\"size-full wp-image-327432\" src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1.png\" alt=\"\" width=\"1800\" height=\"1013\" srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1.png 1800w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-300x169.png 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-1024x576.png 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-768x432.png 768w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/glassnode-studio_busd-market-cap-usdc-market-cap-usdt-market-cap-tusd-market-cap-dai-market-cap-1-1536x864.png 1536w\" sizes=\"auto, (max-width: 1800px) 100vw, 1800px\"\/><\/noscript><\/a><\/p>\n<p id=\"caption-attachment-327432\" class=\"wp-caption-text\">Source: Glassnode<\/p>\n<\/div>\n<h4>The shining spots<\/h4>\n<p>Tether, on the other hand, grew from strength to strength and, despite minor hitches, maintained its shine in the stablecoin ecosystem.  Its market valuation surged by 25% on a year-to-date (YTD) basis, as investors reposed their confidence amid negative signals from rivals.<\/p>\n<p>Another success story has been that of TUSD.  The stablecoin, propped up by Binance after the failure of BUSD, showed exciting results.  TUSD&#8217;s market cap has more than tripled YTD and its market share has surged from 1% to 19%.<\/p>\n<p>The promotional tactic used by Binance to remove trading fees for its BTC-USD pair was a key factor in aiding this surge.  After seeing encouraging results, Binance <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.binance.com\/en\/support\/announcement\/binance-launches-tusd-zero-maker-fee-promotion-and-updates-fee-promotions-for-busd-usd-stablecoin-pairs-a376bf14673044e0a1fae8fe60cb0700\" data-wpel-link=\"external\">expanded<\/a> this service to all TUSD spot trading pairs beginning 30 June.<\/p>\n<h4>CEX over DEX<\/h4>\n<p>Despite titanic events like <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/search\/ftx\" data-wpel-link=\"internal\">ftx<\/a> collapse and USDC depegging, decentralized exchanges (DEX) still accounted for a paltry, 5% of the total stablecoin trading volume, as per the report.  While volumes did spike to 45% during the March banking crisis, it proved to be just an aberration.<\/p>\n<p>Higher liquidity, faster transaction times, and user-friendly interfaces lead traders to choose centralized exchanges over decentralized counterparts.<\/p>\n<div id=\"attachment_327438\" style=\"width: 1294px\" class=\"wp-caption aligncenter\"><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX.webp\" data-wpel-link=\"internal\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327438\" class=\"size-full wp-image-327438\" src=\"data:image\/svg+xml,%3Csvg%20xmlns=\" http:=\"\" alt=\"\" width=\"1284\" height=\"686\" data-lazy-srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX.webp 1284w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX-300x160.webp 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX-1024x547.webp 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX-768x410.webp 768w\" data-lazy-sizes=\"(max-width: 1284px) 100vw, 1284px\" data-lazy-src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX.webp\"\/><noscript><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-327438\" class=\"size-full wp-image-327438\" src=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX.webp\" alt=\"\" width=\"1284\" height=\"686\" srcset=\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX.webp 1284w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX-300x160.webp 300w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX-1024x547.webp 1024w, https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/07\/Stablecoins-DEX-768x410.webp 768w\" sizes=\"auto, (max-width: 1284px) 100vw, 1284px\"\/><\/noscript><\/a><\/p>\n<p id=\"caption-attachment-327438\" class=\"wp-caption-text\">Source: Kaiko<\/p>\n<\/div>\n<p>The growing relevance of stablecoins, especially USDT, was reflected in their <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/ambcrypto.com\/the-story-of-how-usdt-rescued-russians-turks-amidst-economic-turmoil\/\" data-wpel-link=\"internal\">growing demand<\/a> as a safe-haven asset in countries going through political and financial strife.  However, countries like India have expressed strong reservations around its adoption.<\/p>\n<p>As per a report by <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.thehindubusinessline.com\/money-and-banking\/stablecoins-pose-existential-threat-to-policy-sovereignty-cbdc-preferable-rbi\/article67068840.ece#:~:text=Stablecoins%20\" data-wpel-link=\"external\">The Hindu<\/a> The Deputy Governor of India&#8217;s central bank said that stablecoins are useful to only a few countries while in other cases they could have adverse impact on local currencies.<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Nearly 75% of all transactions on centralized crypto exchanges involved a stablecoin. The lopsided growth sparked concerns about weaknesses in the broader ecosystem. Stablecoins have proven to be a popular tool in the Web3 domain over the past few years. By combining the benefits of cryptocurrencies while maintaining a stable value, they have emerged as [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":122497,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[230,225,221,227,226,228,229,60,223,224,222],"class_list":["post-122496","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency","tag-brave","tag-coinbase","tag-crypto","tag-decentralised","tag-decentralized","tag-decentralized-exchange","tag-erc-20","tag-featured","tag-meme-coin","tag-robinhood","tag-solana"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/122496","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=122496"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/122496\/revisions"}],"predecessor-version":[{"id":122498,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/122496\/revisions\/122498"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/122497"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=122496"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=122496"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=122496"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}