The stablecoin market has seen a substantial increase, growing by $2.21 billion between August 9 and August 18, 2024, with Tether (USDT) leading the charge. Tether’s supply surged by 1.26 billion USDT during this period, driving the market’s expansion.
This recent growth follows a $1.53 billion uptick in the stablecoin economy from August 6 to August 9, with Tether contributing 57.01% of the overall increase. Tether’s market capitalization now stands at $116.88 billion, making up 69.40% of the total stablecoin market, which is valued at approximately $168.42 billion.
Over the past month, Tether has grown by 2.9%, while USD Coin (USDC) increased by 3.3%. In contrast, MakerDAO’s DAI experienced a 1% decline, and Ethena’s USDE dropped by 9.2%, struggling to maintain a market cap of $3 billion. Meanwhile, First Digital’s FDUSD saw a significant 17.2% rise in supply.
In related developments, PayPal’s PYUSD has gained ground, overtaking Tron’s USDD to become the sixth-largest dollar-pegged stablecoin. PYUSD’s market cap rose from $791.9 million on August 16 to $828.86 million by August 18, reflecting a $36.96 million increase in just two days. Since July 19, PYUSD’s supply has surged by 41.5%, while USDD has seen only a slight increase of 0.7%.
Other stablecoins have shown mixed results. Alchemix USD (ALUSD) saw a modest 1.1% increase this month, while Aave’s stablecoin GHO grew by 19% since July 19. On the other hand, Paxos’ Pax Dollar (USDP) and Gemini Dollar (GUSD) experienced declines of 6.5% and 6.9%, respectively, over the past 30 days.
The primary drivers of the stablecoin market’s growth are the supply increases for Tether and PYUSD. While other stablecoins like USDC and FDUSD have seen smaller gains, the overall expansion reflects a growing demand for stable assets amid cryptocurrency market volatility.
A recent report from JPMorgan highlights that while the supply of stablecoins is on the rise, it doesn’t necessarily indicate a larger share of the overall cryptocurrency market. Instead, this growth is tied to the increasing market capitalization of digital assets, driven by rising prices of major cryptocurrencies like Bitcoin and Ethereum.
The stablecoin market’s expansion, led by Tether’s significant growth, underscores the evolving role of digital assets in the financial ecosystem. With growing adoption and the entry of new players like PayPal’s PYUSD, the stablecoin sector is poised for further development.
