The stablecoins seem to have less of the wind in their sails than before. The major assets are in fact posting markedly lower capitalizations this year. How to explain this change of course on the part of investors, and what can we expect?
Stablecoin capitalization drops in 2023
If we look at the evolution of the capitalization of the main stablecoins since the beginning of the year, we see that they are facing a wave of departures from investors. While the cryptocurrency market backed by other assets weighed at the beginning of January 2023 138.1 billion dollars, it now represents only 130.7 billion dollars. This corresponds to 7.6 billion dollars that flew awayas investors traded their stablecoins.
Over the past month, Tether (USDT) managed to slightly increase its capitalization (+1.7%), but this is not the case for the other major stablecoins. Circle’s USDC thus sees its capitalization reduced by 4% over the same period, and Binance’s BUSD shows market cap down nearly 15%.
We are therefore witnessing a notable exodus of investors, which signals a change in the way in which assets of this type are considered. And this is due to a more complex environment than in the past.
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Why are stablecoins shunned at the moment?
As the crypto ecosystem has progressed, the stablecoins in circulation have grown exponentially. Considered a haven for crypto investors keen to hedge against volatility, however, they have lost their luster since last yearbecause of several successive cases.
The starting point, this was the downfall of the Terra (UST) ecosystem in 2022, which first benefited other stablecoins. But since then mistrust has spread. During February this year, Binance suffered a major blow: BUSD issuer Paxos was forced to stop creating new tokens. The world’s largest exchange was therefore forced to mark the distance with its own stablecoin.
For Circle, the past few months have also been difficult. USDC temporarily lost its peg to the dollar in March, sending a wave of panic through the ecosystem. Since then, the USDC has lost ground sharply against the USDT of Tether, whereas it was until then a serious competitor to the first stablecoin of the moment.
So who are the winners of these cases? Tether of course, which year after year continues to remain at the top of the rankings. But also the True USD (TUSD) which particularly caught the attention of Binance. Will this still be the case in the coming months? No one knows, the ecosystem of stablecoins has indeed become less “stable” than in the past.
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Source: CoinGecko
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