Tether: Stablecoins Soar to $161B as Market Dominance Dips Below 7%

The stablecoin market capitalization has reached a two-year high of $161 billion as of May 2024, according to a new report from cryptocurrency data platform CCData. This marks the highest level for the stablecoin market cap since April 2022.

Despite this impressive growth, the report notes that stablecoin market dominance actually declined slightly to 6.07%, down from 7% in March. This dip is attributed to a recovery in prices for major cryptocurrencies like Bitcoin and Ethereum, boosted by positive events like the approval of a spot Ethereum ETF in the United States.

Tether Cements Its Dominance

Graph showing Tether's market cap fluctuations hovering around $111.7 billion to $112.1 billion, illustrating its recent stability with minor volatility.

Source: CoinGecko

Leading the charge is Tether (USDT), the largest stablecoin by market cap. USDT achieved an all-time high of $111 billion, representing a staggering 69.3% of the entire stablecoin market.

However, other stablecoins are also seeing significant growth. The report highlights Athena USDe, which saw its market cap rise for the fifth consecutive month to $2.61 billion, an 11.6% increase. This can be attributed to its increasing use as collateral for perpetual futures trading on the Bybit cryptocurrency exchange.

Tokenized Treasury Funds on the Rise

The rise of tokenized treasury funds is another notable trend identified in the CCData report. BlackRock's BUIDL token, which represents shares in the firm's USD Institutional Digital Liquidity Fund, surged 19.6% to $448 million, surpassing Franklin Templeton's BENJI as the largest tokenized treasury fund.

USDC Strengthens Its Position

Circle's USDC stablecoin also continues to perform well, with its market cap rising for the sixth straight month to $32.6 billion in May. This growth corresponds with increased demand and on-chain trading activity on networks like Base and Solana. USDC's trading volume reached an all-time high in March, with its market share by trading volume rising to 8.27%.

Trading Volume Declines

Despite the impressive growth in stablecoin market capitalization, the report notes that stablecoin trading volumes on centralized exchanges fell to $829 billion by May 23, 2024. This decline is in line with historical trends of reduced trading activity in the two months following Bitcoin halving events.

Overall, the CCData report highlights the continued growth and recovery of the stablecoin market, which has now rebounded from the losses sustained during the collapse of the Terra Luna ecosystem and the de-pegging of the algorithmic stablecoin TerraClassicUSD (USTC) in 2022.