The world of cryptocurrency is experiencing a remarkable surge, riding high on the expectations of a crypto-friendly government following Trump’s victory. This optimism has led to a significant increase in cryptocurrency prices, accompanied by a growing demand for stablecoins. The digital-assets market has witnessed an impressive rise in value, surging by nearly a trillion dollars since the election. As Bitcoin and Solana (SOL) continue to reach unprecedented heights, stablecoins are also breaking records, achieving new milestones in market capitalization.
Stablecoins Reach New Heights
The stablecoin market has reached an unprecedented milestone, with the combined market capitalization hitting a record $190 billion this month, according to a report from CCData. This marks a significant achievement, surpassing the previous all-time high of $188 billion recorded in April 2022, just before the Terra-Luna stablecoin collapse. The current momentum in the stablecoin sector reflects a growing trend as more investors seek stability amidst market volatility.
Tether Dominates
Tether’s USDT continues to lead the stablecoin sector, with its market cap rising by 10% over the past month to reach a new peak of $132 billion. Meanwhile, Circle’s USDC has also seen significant growth, increasing by 12% to nearly $39 billion, the highest since the March 2023 regional banking crisis that severely impacted the token. USDT currently holds a commanding 69.9% market share, while USDC follows as the second-largest stablecoin with a 20.5% share.
In efforts to expand its reach, Tether is venturing into new industries, including commodities. The company recently funded its first crude oil transaction in the Middle East, aiming to broaden the usage of USDT across various sectors.
Record-Breaking Tokens
In a remarkable turn of events, 38 out of nearly 200 tracked tokens have reached new all-time high supply levels over the past month. Ethena’s USDe, in particular, saw an impressive 42% increase, reaching a new record of $3.8 billion in November. By holding spot BTC and ETH while shorting an equal amount of perpetual futures, the token generates yield for investors, capitalizing on the funding rate.
The broad-market crypto rally has also led to a substantial increase in trading volumes, with stablecoin pairs on centralized exchanges rising by 77% month-over-month to $1.8 trillion. USDT played a major role, accounting for about 83% of the trading volumes, followed by First Digital’s FDUSD from Hong Kong with a 9% share, and USDC with 8%.
Tether EUR Discontinuation
In a significant development, Tether has announced the discontinuation of its euro stablecoin, EUR₮, halting the processing of new minting requests since 2022. This decision comes amidst the increasingly complex regulatory environment surrounding stablecoins in Europe. Tether is now directing its efforts towards supporting new projects, introducing stablecoins EURQ and USDQ, developed in collaboration with Quantoz Payments and compliant with MiCAR regulations.
As the cryptocurrency landscape continues to evolve, these developments signify a dynamic market responding to external influences and regulatory challenges. Investors and enthusiasts alike are keenly observing these trends, anticipating further growth and innovation in the realm of digital currencies.
