Stablecoins play an increasingly important role in the cryptocurrency world. Judging by the evolution of their supply alone, 2020 is likely to end with a bang. Not too many people will be surprised to learn that USDT is still king of the hill.
Stablecoins Note a Big Supply Increase
As the year 2020 progressed, demand for various stablecoins has increased accordingly. Many traders seem to see out these fiat-pegged currencies to acquire crypto-assets of any kind. It is a remarkable evolution, considering none of these currencies was prominent a few years ago. Most of them are less than three years old.
Fast forward to 2020, and things have gotten very interesting. In January of this year, stablecoins represented $5.6 billion. A substantial amount, primarily dominated by Tether’s USDT. That is still the biggest and most popular stablecoin on the market today. It is plausible to assume that this streak will continue for some time to come.
As of today, all significant stablecoins combined represent a value of over $25 billion. That means the overall supply has increased nearly five-fold in just twelve months. On the trading charts, one can see how almost all markets benefit from an increase in stablecoin supply. Bitcoin has recorded a new all-time high, to give just one example.
As Tether’s USDT remains the king of the stablecoins, it is pertinent to look further down the rankings. USDC, the pegged currency by Circle, is gaining a lot of momentum since the mid-2020. One can say the same for BUSD – issued on the Binance Smart Chain – and DAI, the stablecoin issued on the Ethereum blockchain. All of these currencies perform relatively well, given the current circumstances.
What About The Other Options?
Careful observers may notice several stablecoins don’t have a mention yet. The likes of TUSD, PAX, and GUSD, for example. While all of these pegged currencies circulate on exchanges and other trading platforms, their supply represents a minority in the industry. TUSD is, according to its team, primarily used for OTC trading. Having a competitive edge in that market will ensure a healthy ecosystem.
As far as PAX and GUSD are concerned, it is a bit unclear what is happening there. More specifically, these currencies both appear to be in far less demand. According to CoinGecko, GUSD has a market cap of just under $15.5 million. Paxos Standard, on the other hand, has a market cap of just under $393 million. These numbers are likely to keep trending higher over time.
All of the above makes one wonder how the crypto industry would look without stablecoins. It is almost impossible to picture exchanges without USDT, TUSD, or USDC. These pegged currencies are now a crucial part of the cryptocurrency trading industry. Their role of importance will likely only increase in the years to come.
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