Even as cryptocurrency values continued heading lower in 2022, the value of the stablecoin market continued to increase dramatically.
At the end of 2021 the total value of all stablecoins was $168.3 billion, which is quite a lot. However in the nearly two months since, that value has increased by 9.9% to $185 billion. In addition, stablecoins now account for 10.4% of the $1.77 trillion crypto economy.
How’s that possible when stablecoins are designed to remain pegged at a value of $1?
It’s all due to new tokens being issued, with demand for stablecoins continuing to grow.
While Tether (USDT) remains the largest stablecoin by market cap, it hasn’t contributed much in terms of growth. Instead some smaller, but growing stablecoins are providing much of the growth impetus.
For example, in the past week alone, Circle’s U.S. Dollar Coin (USDC) has seen its market capitalization swell by 21.6% and Binance USD’s (BUSD) market cap grew by 27.9%. Also gaining through issuance have been Terra’s UST token (up 11%) and MakerDAO’s DAI (up 6.1%). And two of the greatest increases have come from Avalanche’s Magic Internet Money (MIM), with an increase of 40.6% in its market cap over the past week, and Gemini’s GUSD which gained 50.4%.
Currently USDT remains the top stablecoin with a market cap of nearly $80 billion. Next in line is USDC with its more than $52 billion market cap, followed by BUSD, which is closing in on a $20 billion market cap. Interestingly though, USDT still commands roughly 85% of all dollar-pegged token swaps.