Market News
Total Stablecoin Value Tops Terra-Era Peak to Near $200 Billion - BLOOMBERG
(Bloomberg) -- The value of the stablecoin market has risen to new heights after regaining ground lost in the aftermath of TerraUSD’s infamous collapse in 2022.
The total market capitalization for stablecoins has swollen 46% this year to a record of about $190 billion on Sunday, according to DeFiLlama data.
Stablecoins are a kind of cryptocurrency designed to maintain a price consistently in line with that of a fiat currency, usually the US dollar. In the past their main use has been as a conduit for traders to move funds in and out of other tokens. But there is now mounting optimism that stablecoins may cement a more prominent role in global commerce — in particular as a tool for cross-border payments.
Tether, which issues the world’s largest stablecoin USDT, has seen its token’s circulation soar to nearly $133 billion, accounting for 70% of the total stablecoin market. The company wants to broaden usage of USDT by pushing into new industries including commodities. It recently announced the funding of its first crude oil transaction in the Middle East.
Meanwhile, Stripe Inc., the $70 billion fintech giant, in October said it plans to buy stablecoin startup Bridge for $1.1 billion in one of the largest-ever acquisitions of a digital-asset startup. Other traditional finance firms including PayPal Holdings Inc. have also ventured into the sector.
The embrace of stablecoins by such organizations may help to avoid the kind of precipitous market crash that followed the toppling of TerraUSD in May 2022. The unraveling of that stablecoin, which was connected to the Terra blockchain founded by Do Kwon, opened up a $19 billion hole in the stablecoin market that took more than two-and-a-half years to fill.
The recent stablecoin surge coincides with a crypto rally spurred by Donald Trump’s victory in the US presidential race. Once an industry skeptic, Trump won over the sector with pledges to put in place more favorable policies.
The overall value of the digital-assets market has risen by nearly a trillion dollars since the election, according to data from CoinGecko. Market bellwether Bitcoin came within touching distance of the $100,000 mark last week before a retreat. It was trading at $93,377 as of 8:22 a.m. Wednesday in London.
