Stablecoins Surge In 2024, But Still Below 2021 Peak; USDT Remains Dominant

In 2024, fiat-backed stablecoins saw a notable increase of 35.4%, pushing their total market cap to $161.2 billion.

Despite this growth, the figure remains below the all-time high of $181.7 billion reached in 2021.

Tether (USDT) continues to dominate the stablecoin space, holding a 70.3% market share. In contrast, USDC has been on a downward trajectory since the U.S. banking crisis in March 2023.

Commodity-backed stablecoins also showed significant growth, reaching a market cap of $1.3 billion in August 2024—an 18.1% increase year-to-date. Tether Gold and PAX Gold lead this sector, representing a combined 78% of the total market cap. Despite their impressive 212x growth since 2020, commodity-backed stablecoins still account for only 0.8% of the value of fiat-backed ones.

Stablecoins Made Up 8.2% Of The Global Cryptocurrency Market Cap As At August 2024

By August 2024, stablecoins made up 8.2% of the global cryptocurrency market cap. This figure has decreased from the peak of 18.4% in 2022, which occurred after the collapse of Terra when investors flocked to more stable assets.

As of August 2024, there are 8.7 million addresses holding stablecoins. USDT, USDC, and DAI collectively account for 97.1% of these holders. USDT leads the pack with over 5.8 million wallets—2.6 times more than USDC. Other stablecoins remain under a million holders each, with 505,000 wallets holding DAI.

Although stablecoins have improved their ability to maintain their peg to $1, challenges remain during times of market volatility. USDT, USDC, and DAI can still de-peg under stress, while partially algorithmic stablecoins like USDD, DAI, and FRAX depend on market arbitrage to stay aligned with their pegs.

Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.

Will Izuchukwu: