Stablecoin Dominance Hits Lowest Since December 2021 Despite Record Monthly Supply
The dominance of stablecoins in the global cryptocurrency market dropped to its lowest level since December 2021, despite record high monthly supply growth.
According to data from CoinMetrics, stablecoin supplies jumped to a record high $88 billion in April, the highest monthly growth since July 2018. However, stablecoin dominance in terms of the global cryptocurrency market cap fell to 17.36%, the lowest since December 2021. At the same time, the total crypto market cap hit a new all-time-high of over $2 trillion.
The decline in stablecoin dominance can be attributed to increasing enthusiasm around cryptocurrencies like Bitcoin and Ethereum. BTC’s market cap surpassed its previous all-time high of $1 trillion in April, while Ethereum’s market cap crossed $400 billion.
Despite the declining dominance, stablecoins are still seen as a safe haven in the volatile cryptocurrency market. A growing number of investors are using stablecoins to store their wealth and make transfers without taking on the risk of price fluctuations. Moreover, with DeFi protocols becoming more popular, the demand for stablecoins for collateral purposes is also increasing.
Stablecoins have come a long way since their inception in 2014. Although initially seen as a way to mitigate the volatility of Bitcoin and other cryptocurrencies, they are now becoming a mainstream asset class in their own right.