Stablecoins hold a record 16% of the total cryptocurrency market cap, despite their shrinking money supply. This is a good sign for the market.
The share of stablecoins amid the general fall in Bitcoin and altcoin quotations already exceeds 16% of the total capitalization of the crypto market. CoinGecko data proves this — the stablecoin sector capitalization as of 15:00 (GMT+3) is approximately $155 billion, while the total crypto market cap is $959.2 billion. For comparison, by early May 2022, the share of stablecoins was 7%.
One of the factors behind the growing share of stablecoins is the overall market decline. While the value of various tokens is rapidly declining, the price of stablecoins remains unchanged. The situation was partly affected by the high-profile collapse of UST, the destabilization of USDD and some other algorithmic stablecoins. This caused doubts, affecting even USDT, the largest of the stablecoins. Tether CTO Paolo Ardoino said today that the company burned $11.1 billion worth of tokens in redemptions: 6.6 billion USDT on Tron and 4.5 billion USDT on Ethereum.
The record share of stablecoins points to the cryptocurrency’s growth potential, as reported in a private letter to investors by analysts at JPMorgan Chase, a U.S. investment bank. According to the experts, the high proportion of stablecoins in the market indicates a high level of overselling and creates the potential for growth of the market as a whole.
