A $9.7 Billion Boom in 14 Days—Stablecoin Market Eyes Historic Peak

Over the past 14 days since Nov. 2, an eye-popping $9.736 billion has flowed into the stablecoin economy, adding to the $555 million boost recorded in October.

Near Record Highs: Stablecoin Economy Grows

Stablecoins have cemented their role as a powerhouse in the crypto world, holding immense value and influence. Over the last two weeks, the fiat-pegged crypto market expanded by 5.63%, injecting a hefty $9.736 billion into the ecosystem. As of Saturday, the stablecoin economy stands at an impressive $182.628 billion. However, it’s still $5.246 billion shy of the record $187.874 billion set on Apr. 24, 2022.

Stablecoin market cap on Saturday, Nov. 16, 2024, according to defillama.com.

Stablecoins currently account for 5.96% of the $3.06 trillion crypto market’s total value. Leading the pack is Tether’s USDT, a true heavyweight with a staggering $127.749 billion market valuation. As of Nov. 16, Tether‘s USDT dominates the stablecoin market with a commanding 69.95% share. Meanwhile, Circle’s U.S. dollar-backed USD Coin (USDC) boasts a $36.906 billion market cap, giving it a 20.21% slice of the pie on Saturday.

The top 1 month gainers in terms of growth out of the top five stablecoins by market cap between Oct. 16 to Nov. 16, 2024.

Trailing far behind the giants, the other three stablecoins in the top five each have market caps under $5 billion. According to defillama.com, Sky’s dai (DAI) holds a valuation of $4.649 billion, Ethena’s USDE comes in at $3.167 billion, and First Digital’s FDUSD stands at $2.287 billion. When it comes to 24-hour global trade volume, the top performers are USDT, USDC, and FDUSD, in that order.

The stablecoin market’s evolving dynamics and volumes reveal a clear hierarchy, with USDT and USDC leading by a substantial margin while smaller players carve out niche roles. Take FDUSD, for example. While its market cap is relatively modest, its strong presence on Binance propels it to handle substantial trading volume. This growth suggests an ongoing and increasing reliance on fiat-pegged assets in the broader crypto economy.

It’s intriguing that the stablecoin market’s past peak aligns closely with the time Terra’s UST reached its all-time high, only to unravel catastrophically the following month. This eerie parallel serves as a reminder of the fragility that can accompany rapid growth in the crypto space and stablecoin risks. As the market inches upward, one can only hope the lessons of UST’s collapse prevent history from repeating itself and foster greater stability in the future.