The Stablecoins Market Cap Has Reached 100B! | Regulation Incoming? | Historical Data On The Market Cap
The stablecoins keeps growing and with that attract attention of regulators. There was a recent proposal for a bill that should sort of “ban” some type of stablecoins.
Regulators and central banks don’t want to have competition in the issuing new dollars 😊.
A lot of things are up to debate when it comes to stablecoins and how some of the most popular are acting but will left that one here. What we will be looking at is how the top stablecoins has been growing and is there any significant changes.
Let’s take a look.
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 as a fiat collateral. Tokens like DAI are backed by crypto collateral usually overcollateralized. HBD has a DEX and a DAO that keeps putting orders around the peg to maintain it.
Here we will be looking at:
- Tether [USDT]
- USD Coin [USDC]
- Binance USD [BUSD]
- Dai [DAI]
- Huobi USD [HUSD]
There is a few more out there but we will focus on these as the biggest ones in market cap.
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 market cap 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 market cap by x130!
After the bull run ended in 2018, Tether has seen a drop in the market cap going from almost 3B at the end of the bull run to under 2B.
In 2019 Tether started increasing its market cap, printing more USDT and by the end of the year reached more than 4B.
In 2020 the Tether printer has gone full speed and at the end of year Tether had 20B in market cap.
In the first half of 2021 the market cap od Tether kept growing with more of it being issued and now it is around 62B in market cap.
What is interesting is that in the last month, July 2021, Tether has slowed down the printing, and it has even reduced its market cap by 1B!
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.
USDC has been growing exponentially in 2021. It has went from 4B at the start of 2021 to 27B in August 2021.
USDC has enjoyed a better reputation in the crypto industry for now with regular audits for its reserves.
Binance USD [BUSD]
The Binance exchange stablecoin. It’s 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. It is around 12B at the moment, still smaller than USDC.
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.
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 we 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 5.5B in marketcap.
Unlike the USDT, USDC, BUSD, 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 😊.
The holders of the governance token Maker, are deciding on the cap of the DAI issued.
Stablecoins Market Cap
Here is the chart for the total 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 110 billions at the moment of writing this. There is huge growth in the last six months.
We can barley notice a smoothing out now, especially since Tether has slowed down a bit with the printing.
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 don’t 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 2021 till August 2nd, the overall market cap of stablecoins has grown from 27B to 110B, almost 4x the market cap, adding another 83 billion.
No wonder regulators are now starting to look more closely to stablecoins!
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 62B marketcap out of the total 110B. A 56% dominance. USDC is on the second spot with 27B (25%), then come BUSD and DAI.
Overall in 2021 stablecoins have grown massively. A 82 billions rise in market cap. What is interesting is that Tether has slowed down in the last month, while USDC has kept growing, taking over a bit of the market share of Tether. BUSD has also grown a lot, but not at the same scale as USDC. DAI as the only big stablecoins that uses smart contracts and decentralized governance, has been growing at slower pace.
Just for context the market cap of HBD is around 6.3 millions, and if we add the HBD in the DHF, that doesn’t count as debt we are at 11 millions. The whole market cap of HIVE at the moment is around 150M. If HBD becomes more stable and more liquid in the future it gain give the Hive network a ton of value. This is possible it just requires some time. By design the HBD is far more capital efficient then the DAI model.
What stablecoin are you using?
All the best
Posted Using LeoFinance Beta