So Stable! Stablecoins Now Hold Over 15% Of Crypto Market Share

The market value of stablecoins has been rising steadily in recent months. Amid a broader crypto market collapse, stablecoins gained further market share and now hold more than 15% of the total crypto market capitalization.

Stablecoins are blockchain-based tokens with a value pegged to a fiat currency such as the US Dollar. While several versions of stablecoins exist, the most popular ones have fiat currency reserves and are managed by a centralized entity, such as Tether and Circle.

According to data from CoinMarketCap, the total market capitalization of stablecoins currently stands at $155 billion. This figure represents 17.2% of the entire crypto market cap, just above $900 billion. Interestingly, three of the largest cryptocurrencies are stablecoins namely: Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).

USDC Gains Market Share as Tether Retains Stablecoin Leader Spot

The top three largest stablecoins account for more than 90% of the total market share ($140 billion). However, the past few months have seen leader Tether (USDT) lose a portion of its market share to close competitors. Since the turn of the year, Tether’s total market value has dropped from $80 billion to around $69 billion at the time of writing.

(USDT Market Cap YTD)

On the other hand, USDC has grown from $40 billion to $54 billion. Similarly, Binance-backed BUSD has risen from $14 billion to $17 billion.

(USDC Market Cap YTD)

(BUSD Market Cap YTD)

Stablecoins becoming increasingly attractive

A number of factors have largely contributed to the growing adoption of stablecoins. Ideally, the recent crypto market decline forced many crypto investors to exit volatile market positions in favor of the stability provided by stablecoins.

Additionally, the current global macro conditions make stablecoin holdings fairly attractive to savers. Most stablecoin holders generate yield anywhere between 6-10% yearly, making it more attractive than fiat held in traditional bank accounts.

Meanwhile, the infamous blow-up of algorithmic stablecoin TerraUSD (UST) has led to increased market focus on centralized options. Although not flawless, centralized options offer relative safety to investors and will likely continue to lead the market for the foreseeable future.