The stablecoin market continues to see explosive growth this year, hitting record highs. Findings reveal that the total supply for all stablecoins has surpassed the $11 billion mark, doubling its value since February.
100% Growth in 4 Months
The market cap for stablecoins was just a little above $5 billion in January, and the number grows to $5.65 billion in February. Following the bloodbath in the crypto market on March 12, the stablecoin supply record unprecedented growth, racing to $10.4 billion in May.
According to data on Messari’s Stablecoinindex, for the first time, the total value of assets for all stablecoins has surpassed $11.28 billion, representing 100% growth in four months.
Tether USDT Dethrones XRP
As expected, leading stablecoin Tether (USDT) is responsible for a large portion of the market growth. Data suggests that USDT controls about 87% of the total stablecoin market supply.
In the second week of February, Tether’s market cap was only $4.66 billion, representing 82% of the market share. The stablecoin issuer started its printing spree after the March crash. CryptoPotato reported that Tether Treasury minted as many as 1.6 billion tokens in April and 480 million tokens in the first week of May.
With its asset currently valued at $9.88 billion, according to Stablecoinindex, USDT has become the third-largest cryptocurrency in the world, dethroning XRP for the first time. If Tether continues this parabolic run, it could threaten Ether’s position as the second-largest crypto asset in terms of market cap.
Other major stablecoins that recorded significant growth over the last four months are TrueUSD (TUSD), Paxos (PAX), USD Coin (USDC), and DAI.
Circle’s USDC controls the second-largest share of the stablecoin market, with its total value standing at 732 million, which accounts for about 7% of the market.
Reason To Worry?
As stablecoin issuers, especially Tether, continue to print more tokens, members of the crypto industry are speculating whether or not it is a reason to worry.
Stable coins blast through $10 billion market cap. Should we be concerned at all? pic.twitter.com/9Yg4usJgt6
— Mati Greenspan (tweets are not trading advice) (@MatiGreenspan) June 15, 2020
Regardless, a recent study in April argued that the issuance of more stablecoins does not inflate or directly affect the prices of the crypto markets.
Industry expert and co-founder of Blockstream, Adam Back, also noted that there is no reason to be concerned because USDT is just fuel, plus the total supply could be more.