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CCData report unveils stablecoin market value declines to 2-year lows

According to a new report, the stablecoins market value has dropped for the first time since August 2021 after 16 straight months of decline.

As per the study published on July 20 by cryptocurrency analytics platform CCData, the stablecoin market cap decreased by 0.82% from the beginning of the month until July 17, bringing the sector’s market size to $127 billion.

The market share of stablecoins decreased somewhat and is now 10.3%, down from 10.5% in June.

stablecoin market value declines to 2-year lows
stablecoin market value declines to 2-year lows

Pax Dollar (USDP), one of the top ten stablecoins, was the most negatively impacted, dropping the most (43.1%) to $563 million in July, its lowest level since December 2020.

According to CCData, the decentralised autonomous organisation MakerDAO, which is responsible for the Maker protocol, is largely to blame for the decline. MakerDAO decided to withdraw $500 million USDP from its reserves since it was unable to generate more income.

As of July 17, Tether, the biggest stablecoin by market size, had reached an all-time high market cap of $83.8 billion, putting it 65.9% ahead of the competition.

Market capitalizations for USD Coin (USDC) and Binance USD (BUSD) decreased to $26.9 billion and $3.96 billion, respectively, by 3.01% and 4.57%. The market capitalization of USDC has dropped for seven months in a row, reaching its lowest level since June 2021.

Although stablecoin trading volumes had previously declined, they rose for the first time since March in June, rising 16.6% to nearly $483 billion.

According to CCData, the rise in spot Bitcoin BTC exchange-traded fund filings and the SEC litigation brought against Binance and Coinbase are two of the main reasons for the rise in stablecoin trading volumes last month.

The SEC’s legal action against the company, which took place in June, resulted in a halt of fiat deposits on Binance.US.  According to CCData, this allegedly caused USDT and USDC to depeg from the US dollar on the exchange.

The restriction of fiat deposits “has caused an enormous decrease in the liquidity of USDT and USDC, causing a discount of approximately 27% and 18%, respectively.”

The market cap of the decentralised stablecoin market, which consists of Dai (DAI), Frax (FRAX), and USDD (USDD), rose by 0.43% to $7.52 billion in July, representing the first rise since February. Nevertheless, the market cap is still 78.1% behind its all-time high, which was $34.3 billion in April.

The demise of the Terra Luna ecosystem and the algorithmic stablecoin TerraClassicUSD (USTC) seeing a depeg of about 100% respectively triggered the start of this downtrend.

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