A new report from cryptocurrency analysis platform CCData reveals that stablecoin market capitalization has experienced a continuous decline for 16 straight months, reaching its lowest level since August 2021. Between the beginning of July and July 17, the market value of stablecoins dropped by 0.82%, leading to an industry market value of $127 billion. The stablecoin market dominance also slightly decreased from 10.5% in June to 10.3%.
Among the top 10 stablecoins, Pax Dollar (USDP) suffered the most significant decline, falling by 43.1% in July to $563 million, its lowest level since December 2020. CCData attributes this drop to MakerDAO's decision to remove $500 million in USDP from its reserves due to a failure to generate additional revenue. Despite this decline, the market capitalization of the largest stablecoin, Tether (USDT), reached a record high of $83.8 billion, with stablecoins' overall market dominance rising to 65.9% as of July 17.
USD Coin (USDC) and Binance USD (BUSD) also experienced declines in market caps by 3.01% and 4.57% respectively, reaching $26.9 billion and $3.96 billion. USDC's market capitalization has seen seven consecutive months of declines, reaching its lowest point since June 2021. Interestingly, despite the overall decline in stablecoin market capitalization, trading volumes increased by 16.6% in June to approximately $483 billion, marking the first monthly increase since March.
The boost in stablecoin trading volumes last month was mainly driven by exchange-traded fund filings and the suspension of fiat deposits caused by the SEC's lawsuit against Binance.US. This suspension resulted in USDT and USDC detaching from the US dollar on exchanges , leading to sharp liquidity drops and discounts of around 27% and 18% respectively.
In the decentralized stablecoin market, which includes Dai (DAI), Frax (FRAX), and USDD (USDD), market capitalization saw a slight increase of 0.43% to $7.52 billion in July, the first positive month since February. However, it is still down 78 .1% from its all-time high of $34.3 billion in April. The downtrend in the stablecoin market was triggered by the collapse of the Terra Luna ecosystem and the significant decoupling of the algorithmic stablecoin TerraClassicUSD (USTC).
