Stablecoin market cap rises to 2-year highs as dominance slides to 6%: CCData

Stablecoin market cap reaches $161 billion in May, reflecting traders' optimism amid the current crypto bull market.
Stablecoin market cap reaches $161 billion in May, reflecting traders' optimism amid the current crypto bull market.

According to a new report by CCData, stablecoin market capitalization reached its highest level since April 2022, following eight consecutive months of growth.

The cryptocurrency analytics platform reported on May 29 that the stablecoin market cap rose 0.63% from the start of the month, reaching $161 billion. However, stablecoin market dominance slightly decreased to 6.07%, down from 7% in March.

“This decline underscores a recovery in the prices of major crypto assets, reflecting improved market sentiment following the unexpected approval of a spot Ethereum ETF in the U.S..”
Stablecoin and CBDC monthly performance. Source: CCData

Of the top ten stablecoins, Athena USDe's market cap climbed for the fifth straight month, increasing 11.6% to $2.61 billion. CCData attributes this rise to its expanded use as collateral for perpetual trading on Bybit.

Source: Bybit

Tether (USDT), the largest stablecoin by market cap, recorded an all-time high market cap of $111 billion as of May 29, increasing its stablecoin market cap dominance to 69.3%.

BlackRock’s tokenized fund token BUIDL, surged 19.6% to $448 million, making it the largest tokenized treasury fund, surpassing Franklin Templeton’s BENJI. BUIDL represents a share in BlackRock’s USD Institutional Digital Liquidity Fund and can be swapped to USDC on a 1:1 basis.

Stablecoins market cap performance since March. Source: CCData

The report also reveals an increase in Circle’s USDC (USDC) market capitalization for the sixth consecutive month to $32.6 billion in May.

USDC market cap and trading volume. Source: CCData

This increase aligns with a rise in demand, with USDC pairs recording an all-time high monthly trading volume in March. USDC's market share by trading volume has risen for the second month to 8.27%.

The report noted that USDC has benefited from increased on-chain trading activity on networks like Base and Solana, with the percentage of USDC supply on these chains rising to 9.29% and 7.78%, respectively.

Despite the market cap rises, stablecoin trading volumes on centralized exchanges fell to a monthly low of $829 billion on May 23.

“Trading activity on centralized exchanges has historically declined in the two months following the Bitcoin halving event,” the report noted.

Overall, the CCData report concludes that the total market capitalization of stablecoins has now recovered from the losses incurred since the collapse of the Terra Luna ecosystem and the near 100% depeg of the algorithmic stablecoin TerraClassicUSD (USTC), which initiated a seventeen-month downtrend.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.