<\/p>\n
- \n
- The flattening of stablecoins\u2019 growth curve came as a stark contrast to other cryptocurrencies.<\/i><\/li>\n
- The world\u2019s largest stablecoin by market cap, USDT, retained its numero uno position.<\/em><\/li>\n<\/ul>\n
The presence of stablecoins has added a semblance of calmness in an otherwise turbulent world of cryptocurrencies. These derivatives of popular fiat currencies made crypto trading hassle-free, allowing traders to preserve their fiat value without having to cash out of the market.<\/p>\n
As flat as stablecoins<\/h4>\n
However, the current state of the market won\u2019t exactly cheer the stablecoin proponents. According to popular on-chain analyst Patrick Scott<\/a>, stablecoin market cap has trended sideways over the last three months or so.<\/p>\n
Citing DeFiLlama, Scott mentioned that the trajectory plateaued after declining for a year and a half. Recall that the decline was precipitated by the implosion of stablecoin Terra USD [UST]<\/a> in May 2022.<\/p>\n
![\"\"](\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/10\/TVL.jpg\")
<\/a><\/p>\nSource: Patrick Scott\/DeFiLlama<\/p>\n<\/div>\n
The flattening of stablecoins\u2019 growth curve comes in a stark contrast to the spirited recovery of other cryptocurrencies. The world\u2019s largest crypto, Bitcoin [BTC]<\/a>, has more than doubled since the start of the year.<\/p>\n
Ethereum [ETH],<\/a> the largest altcoin, accumulated gains of more than 50% year-to-date (YTD).<\/p>\n
Having said that, the fact that the downtrend was halted meant that money stopped exiting the market, as stated by Patrick Scott.<\/p>\n
Lull on the trading front<\/h4>\n
The flat line also reflected lackluster trading activity in the market. As mentioned earlier, stablecoins are the primary way for traders on non-fiat crypto exchanges to enter and exit trades.<\/p>\n
However, with the volatility remaining elusive, trades on exchanges dipped, and so did demand for stablecoins.<\/p>\n
The following chart from CoinMarketCap highlighted the dramatic drop in trading volumes for much of the third quarter (Q3).<\/p>\n
![\"\"](\"image\/svg+xml,%3Csvg%20xmlns=\")
![\"\"](\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/10\/volume-24h_20221030_20231031_Coinmarketcap-scaled.jpeg\")
<\/a><\/p>\nSource: CoinMarketCap<\/p>\n<\/div>\n
Winners and losers<\/h4>\n
Notably, Tether [USDT]<\/a> expanded its dominance in 2o23. The U.S. Dollar-pegged crypto\u2019s market value rose 25% YTD to $83 billion as of this writing, per Glassnode. Barring minor depegging episodes, USDT remained rock solid throughout the year.<\/p>\n
On the other hand, USD Coin [USDC]<\/a> has failed to recover since its exposure to the March banking crisis<\/a>. Though still the second-largest stablecoin, its market cap has shrunk by 41% since the fiasco.<\/p>\n
The algorithmic stablecoin DAI<\/a> also suffered the same fate as USDC because of deep linkages. However, concerted efforts<\/a> by the issuing protocol MakerDAO [MKR]<\/a> revived demand for the stablecoin.<\/p>\n
- The world\u2019s largest stablecoin by market cap, USDT, retained its numero uno position.<\/em><\/li>\n<\/ul>\n
![\"\"](\"https:\/\/statics.ambcrypto.com\/wp-content\/uploads\/2023\/10\/glassnode-studio_usdt-market-cap-usdc-market-cap-dai-market-cap.png\")