The stablecoin market has reached a new all-time high, with a market capitalization of $168 billion. This marks 11 months of continuous growth, according to data from DeFiLlama. The total stablecoin market cap has now surpassed its previous peak of $167 billion in March 2022. After reaching that high in 2022, the market saw a sharp decline, dropping to $135 billion by the end of that year.
New Money Entering the Market?
Crypto analyst Patrick Scott, also known as “Dynamo DeFi,” believes the recent rise in stablecoin market cap may indicate new money entering the crypto market. In an August 26 post on X, he said, “And just like that, we’re at a new all-time high. Total stablecoin market cap, excluding algorithmic stables, is now at the highest point ever.”
While Scott did not speculate on the exact reasons for the increase, he mentioned that retail investment has been present for at least eight months.
Tether and USD Coin Leading the Charge for the Stablecoin Market
Among the stablecoins, Tether (USDT) has been the standout performer. Starting 2024 with a market cap of $91.69 billion, it has seen steady growth throughout the year, reaching over $117 billion in August.
Circle’s USD Coin (USDC) has also experienced gains, with a market cap surpassing $34 billion in 2024. However, this is still below its all-time high of $55.8 billion in June 2022.
Decline in Stablecoin Trading Volumes
Despite the increase in market capitalization, trading volumes have seen a decline. A report by CCData shows that trading volumes fell by 8.35% to $795 billion in July due to lower activity on centralized exchanges.
The report suggests that the Markets in Crypto-Assets Regulation in Europe may be causing concerns about the future of USDT, contributing to the drop in trading activity. This downward trend has continued into August, with current trading volumes just above $46 billion.
