Since the beginning of 2022, the value of stablecoins on Ethereum (ETH) has witnessed a notable decline of 34%, while stablecoins on TRON (TRX) have experienced a substantial growth rate of 57.7%, as reported by Sixdegree Lab.
The supply of stablecoins on Ethereum has consistently decreased, diminishing from its peak of $100 billion to $66 billion, indicating a decline of 34%.
In contrast, stablecoin supply on TRON has shown a consistent upward trajectory, increasing from $31 billion in 2022 to $48.9 billion. This remarkable growth of 57.7% aligns with the overall trend in the market.
It’s noteworthy that despite the recent bullish market conditions, the overall value of stablecoins has not exhibited a significant increase.
As of the present, the total market value of stablecoins is recorded at $129.5 billion, indicating a decline of 31% from its peak value of $188 billion.
Within the stablecoin market, Tether (USDT) maintains the largest market share at 56.3%, followed by USD Coin (USDC) at 30.5%, and DAI at 5.07%.
The individual values of these three dominant stablecoins are as follows:
– Tether (USDT): $40.03 billion
– USD Coin (USDC): $21.7 billion
– DAI: $3.6 billion
Collectively, Tether, USD Coin, and DAI contribute significantly to the overall stablecoin market with their combined value.
Major Stablecoin Holders
Approximately 50% of stablecoins are held in Externally Owned Accounts (EOAs), while around 30% are accounted for by centralized exchanges (CEXes). In contrast, DeFi protocols currently hold only about 5.5% of stablecoins, marking a notable decline from its peak of approximately 25% in January 2022.
The reduction in stablecoin supply within DeFi protocols on the Ethereum blockchain can be attributed to the rise of Ethereum Layer 2 solutions. These Layer 2 solutions have created a more conducive environment for the growth of DeFi and the development of innovative protocols.
When examining Ethereum stablecoin holders, it becomes evident that the majority (94.2%) possess less than $1,000 worth of stablecoins, collectively contributing only 9.28% to the overall stablecoin holdings.
In contrast, addresses containing over 100,000 stablecoins constitute approximately 0.562% of all addresses but significantly contribute 87.6% to the total stablecoin holdings.
Remarkably, about 60% of the stablecoins held by these prominent addresses remain inactive. These addresses fall into two categories: reserve addresses, characterized by a stablecoin expenditure to income ratio below 0.2, or inactive addresses that have not participated in any stablecoin transactions within the past 180 days.
Stablecoins See Positive Supply Growth
In November, there was a notable shift as the 90-day net change in the supply of the leading stablecoins—USDT, USDC, Binance USD (BUSD), and Dai (DAI)—turned positive. This marked the first occurrence since the mid-May 2022 collapse of Terra.
Since 2020, stablecoins have been extensively utilized to finance cryptocurrency acquisitions. An upswing in their supply is interpreted as a potential indicator of increased buying pressure or a reservoir of funds available for investors to deploy in purchasing cryptocurrencies or as margin in derivatives trading.
Stablecoins continue to play a pivotal role in the daily functions of the cryptocurrency industry, serving as a crucial link between traditional finance and cryptocurrencies.
William Quigley, a co-founder of Tether, emphasized the significance of stablecoins, stating, “Stablecoins have become the foundation of the cryptocurrency market.” He further highlighted their indispensable role in almost all decentralized finance (DeFi) applications, noting, “Without stablecoins, overall trading volume and liquidity in the crypto market would likely drop 75%.”
