Tether (USDT) Still Dominating StableCoin Market During Crypto Market Downturn
Bitcoin (BTC)’s price hit a new yearly low today, dropping below $6,000 to its lowest price in 2018. With the rest of the market following closely, nearly $30 billion was wiped off the entire cryptocurrency market capitalization, between November 14 and 15.
Amid the chaos, and as has become the case, traders sought an escape route from the mayhem and broader sell-off resulting from the volatility.
The hedge or safeguard against this side of crypto trading is provided by stablecoins, whose popularity has surged with the release of several new U.S dollar-backed digital assets.
Additionally, very few exchanges provide fiat alternatives- mainly because of regulatory constraints.
No surprise then that stablecoins, currently viewed as safer to its price stability feature, experienced massive surges in volume, with some coins seeing 24-hour volume increases of up to 200 percent.
Tether (USDT) is the most popular stablecoin and has so far ruled the crypto market. However, that could change due to potential competition from USD-backed coins likes True USD (TUSD), USD Coin (USDC), Paxos Standard Token (PAX) and Gemini Dollar (GUSD).
The performance of these stable price coins during the market decline highlights two things: one, some of the new stablecoins are becoming more popular than others, and two, USDT still reigns supreme with its volume accounting for the largest chunk of the market.
How the top stablecoins performed
During the recent shake-up, all six U.S Dollar-pegged stablecoins experienced a spike in daily trading volume, with the least seeing a 50 percent increase while the best one surged by nearly 400 percent.
The coin that saw the biggest surge in volume in the twenty-four hour trading period was USDC, which saw its intraday trading volume rise by about 397 percent.
Backed by Circle and Coinbase, USD Coin (USDC)’s 24-hour trading volume spiked from about $5 million to over $25 million in the 24-hour window between November 14 and November 15.
With a surge of over $20 million in volume, USDC inched into the top 50 cryptocurrencies list by market capitalization as recorded by XBT.net. It currently has a market cap of $144 million and a 24-hour volume of over $7 million.
Notably, leading crypto exchange Binance has added support for USDC, and the potential increase in exposure could play a role in increasing the stablecoin’s popularity.
The DAI increased by 238 percent, and USDT saw its 24-hour volume rise by over 112 percent. Gemini Dollar surged by 68 percent but saw the least in terms of volume as it only added about $1.5 million to its daily trading volume to hit over $3.5 million.
Paxos Standard Token (PAX) saw the least change with just 50 percent volume increase in the twenty-four-hour window, rising from $45 million to $75 million.
Tether (USDT) still the top stablecoin
Tether (USDT)’s performance in the twenty-four hour period between November 14 and 15 only put it in the fourth spot among the stablecoins.
However, in terms of overall market share in trading volume among stablecoins, USDT’s percentage remained relatively unchanged amid the market-wide sell-off.
On November 14, USDT’s 24-hour trading volume accounted for about 97 percent of the market. At the time, the stablecoins’ market accounted for a total of $2.6 billion in valuation.
On November 15, the prices stable coin’s total market capitalization had surged more than 100 percent to reach over $5.5 billion.
Notable is that USDT still controlled about 97 percent of the daily trading volume for stablecoins, putting it on top despite the relatively minor percentage surge.
The emergence of new stablecoins is yet to seriously eat into tether’s daily trading volume share, with the somewhat controversial coin having a current trading volume of over $3.3 billion.
Tether is the second most traded cryptocurrency according to XBT.net with over 24 percent of the current daily trading volume.
USDT’s dominance will likely continue for a while, with its presence in over 400 crypto markets dwarfing the rest of the stablecoin market.
This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.