From a price perspective stablecoins are not very interesting. After all their sole purpose it to not fluctuate in price, or more precise being pegged to the USD. But from a market cap perspective they are moving a lot and can be very interesting. Their market cap has grown a lot in the previous years.
Letโs take a look at this.
There are a lot of stablecoins these days. Although they become more popular in the last bull run. Since then more have come to existence. As mentioned, the basic function of these tokens is to keep a peg to a fiat currency, in most cases USD. To do this usually an equal amount of money deposited in a bank is need for each token minted.
Here we will be looking at:
- Tether [USDT]
- USD Coin [USDC]
- Dai [DAI]
- Binance USD [BUSD]
- Terra-UST
- Huobi USD [HUSD]
There is a few more out there but we will focus on these one for now.
Stablecoins Market Cap
Here is the chart for the stablecoins market cap.
The chat above includes the stablecoins from the previous list. There are some others but these consist 99% of the market cap.
This is quite the chart. The market cap of stablecoins has literally went vertical reaching 60 billions at the moment of writing this. There is huge growth in the last six months.
When we put the chart above on a yearly basis we got this.
The market cap is for the end of the year.
We can see that the numbers for 2015 and 2016 donโt even show on the chat. The market cap for stablecoins in these years in in a few millions with only Tether USDT around. In 2017 the stablecoins market cap reached 1B for the first time. Since then the market cap of the stablecoins kept increasing each year, even trough the bear market.
In 2020 the marketcap of the stablecoins increased for more than 20B, going from 4B to 26B. In the first three months of 2021 the marketcap of stablecoins increased for more than 30B, doubling itself and reaching 60B. Will be interesting how will 2021 ends ๐.
Now lets take a look at the top four stablecoins individually.
Tether [USDT]
Tether is the oldest stablecoin in crypto. It has been around since 2015. Allegedly its founded by the Bitfinex exchange. A lot of controversy around this coin in the past, including court cases. The main issue that has been raised has been is each coin backed by one dollar in the bank.
Here is the historical marketcap for Tether
As mentioned, Tether has been around from 2015. But until 2017 the market cap for tether has been very low. In 2017 it started to peak up. Started with around 10M at the begging of 2017 and ended the year with 1.3 billion in market cap.
In 2017 Tether has increased its marketcap by x130!
After the bull run ended in 2018, Tether has seen a drop in the marketcap going from almost 3B at the end of the bull run to under 2B.
In 2019 Tether started increasing its marketcap, printing more USDT and by the end of the year reached more than 4B.
In 2020 the Tether printer has went full speed and at the end of year Tether had 20B in market cap.
In the first three months of 2021 the market cap od Tether kept growing with more of it being issued and at the end of March 2021 Tether has reached 40 billions in market cap, twice the size from the end of 2020.
Even with all the controversy around USDT in the previous years, it still remains the most used stablecoin in the crypto industry.
USD Coin [USDC]
USDC is a common project between Coinbase and Circle. Its supply should be more legit.
Here is the chart.
I have intentionally left the horizontal axis on a same scale with Tether, to show that this stablecoin, and the others have come after Tether.
USDC started its journey at the end of 2018. Same as USDT, a lot of USDC has been printed in 2020 and in the first months of 2021.
The marketcap for USDC at the moment stands at 10B, quarter from the one of Tether.
USDC has enjoyed a better reputation in the crypto industry for now.
Dai [DAI]
DAI is the decentralized version for stablecoin. Its run as a smart contract on Ethereum. Everyone can use the MakerDAO protocol, deposit collateral and generate DAI as a loan.
DAI started even later than USDT or USDC. The current version of DAI (multilateral) stared in January 2020. From what I know there was a previous version of DAI, a single collateral one, that started at the end of 2017. Although the market cap for DAI is available only from January 2020.
We can see that the DAI marketcap has grow a lot as well. At the moment DAI has around 3B in marketcap.
Unlike the USDT and USDC, all DAI is generated in a decentralized manner with collateral locked in a smart contract. The average ratio of the collateral is somewhere 3:1. So for 1B DAI there is an approximate 3B collateral. No fractional reserve policy here ๐.
Binance USD [BUSD]
The Binance exchange stablecoin. Its mostly used on Binance and BSC as well as a trading pair against other cryptos.
Again, here we are seeing a sharp increase in supply for BUSD in the last period. BUSD has overtaken DAI in terms of market cap just by a fraction. It also has around 3B MC at the moment.
As far as for security goes this is a quote from the official web.
๏ Binance USD (BUSD) is a 1:1 USD-backed stable coin issued by Binance (in partnership with Paxos), Approved and regulated by the New York State Department of Financial Services (NYDFS), The BUSD Monthly Audit Report can be viewed from the official website.
Top Stablecoins Rank
Here is the chart for the latest market cap of the top stablecoins.
As we can see Tether USDT is still dominating the stablecoins arena, with 40B marketcap out of the total 60B. A 66% dominance. USDC is on the second spot with 10B, then come BUSD and DAI with a very similar market cap of 3B.
Terra UST has around 1.4B, but it should be noted that it has grown very fast in the last few months, and then the Huobi stablecoin HUSD with 600M.
What stablecoin are you using?
