- Stablecoins maintain dominance with a $235.035 billion market cap despite downturns.
- Tether, USDC, and DAI show resilience during widespread crypto market liquidations.
- Stablecoins ensure US dollar dominance in global finance and cross-border transactions.
Recently, the market has been turbulent, with sweeping losses in market valuation of the different sectors. Despite the unsteady cryptocurrency market overall, stablecoins remain in defiant health. Despite the market downturn and overall economic uncertainty, stablecoins maintain their all-time high market capitalisation levels. These currently stand at $235.035 billion.
Stablecoin Market Continues to Show Resilience
Stablecoin continues to display extreme resilience despite all the problems the crypto market faces. Over the past week alone, its total market cap increased by 0.50%, amounting to $1.177 billion. This rise in the market cap comes at a time when other riskier assets like altcoins are under immense downward pressure. Due to the stablecoin market being one of the largest in the crypto market, the total market cap is now dominated by the stablecoin. This is with a whopping 61% dominance from Tether (USDT).
Cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) have dropped in value, but stablecoins traditionally tied to the US dollar have primarily held their ground. According to the latest data, destabilized USDT, USDC, DAI, and other prominent stablecoins hold the line and function.
Today, the market cap of Tether is $144.18 billion, with a trading volume above $132 billion. Despite the price going up and down a bit, its price is still relatively hard to move. USDC and DAI also hold stability as assets, with market caps of USDC being $60.36 billion and DAI being $5.36 billion. However, Bitcoins, Ethereum, and other digital coins maintain their values as other digital coins have struggled to keep their values in the more significant market retreat.
Broader Market Downturn and Liquidations
The whole cryptocurrency market is now facing a significant slump, as confirmed by a string of liquidations. According to Coinglass data, the market has been liquidating over $1 billion in the last 24 hours. The drive behind this spike in liquidations, however, is a rigid combination of global economic uncertainty and specific external pressures, including the ongoing trade war between the US and China.
In response to these conditions, the market has reacted, as Bitcoin and the price of Ethereum are down substantially, below $78,000. Over 24,000 traders were liquidated, ensuring a massive uptick in market instability. To this end, international geopolitical tensions and continuous uncertainty within the US economy have worsened the situation.
Since this environment, many investors have found it wise to move their assets to safer places and seen stablecoins as a dependable destination at times like these. However, stablecoins are associated with low volatility and growing use for cross-border transactions, remittances, and hedging inflation, positioning them as an important part of the evolving crypto landscape.
The Role of Stablecoins in Global Finance
Stablecoins are doing more than just holding up during market downturns. They are enabling an expanding role in the international financial system that integrates their money and their money closer to home. Stablecoins are key to the success of the US dollar as the dominant currency in global markets, according to Bryan Pellegrino, CEO of LayerZero Labs. Pellegrino argues that stable coins, specifically dollar-pegged ones, are the US dollar’s best means of safeguarding its status as the dominant international reserve currency.
Pellegrino views stablecoins as an essential tool in financing cross-border transactions and ensuring the US dollar remains the currency of choice for effective international trade. An example is Tether, which has been buying US Treasury bonds and entrenched itself as a powerhouse in global finance. As stablecoins grow in popularity in countries with high inflation levels and volatile currencies, such as Argentina and Venezuela, their use to assist the dominance of the US dollar persists.
First, a recent Chainalysis report indicates that more than half of the digital asset transfers to Latin America were in stablecoins. Due to the region’s history of economic crisis and high inflation rates, stablecoins have become increasingly popular as a value store and for cross-border transactions. The adoption of stablecoins is expected to keep on an upward trajectory as the financial infrastructure in this region improves.
