The Rise Of Stablecoins | Historical Market Cap

LeoFinance
1 month ago
(edited)
5 Min Read
910 Words

From a price perspective stablecoins are not very interesting. After all their sole purpose it to not fluctuate in price. But from a market cap perspective they are moving a lot and can be very interesting. There market cap has grown a lot in the previous years.

Let’s take a look at this.

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There are a lot of stablecoins these days. Although they become more popular in the last bull run. Since then more have come to existence. As mentioned, 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.

Here we will be looking at:

  • Tether [USDT]
  • USD Coin [USDC]
  • Dai [DAI]
  • Binance USD [BUSD]
  • Huobi USD [HUSD]
  • TrueUSD [TUSD]

There is a few more out there but we will focus on these one for now.

Tether [USDT]

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

image001.png

Well this chart is a bit more dynamic than the price chart😊

As mentioned, Tether has been around from 2015. But until 2017 the market cap for tether has been very. 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 marketcap by x130!
After the bull run ended in 2018, Tether has seen a drop in the marketcap going from almost 3B at the end of the bull run to under 2B.
In 2019 Tether started increasing its marketcap, printing more USDT and by the end of the year reached more than 4B.
In 2020 the Tether printer has went full speed and at the moment of writing this the Tether market cap is more than 16B.

12 billion in Tether printed just in 2020. USDT has reached the no.3 spot on the rankings flipping XRP.

Even with all the controversy around USDT in the previous years, it still remains the most used stablecoin in the crypto industry.

USD Coin [USDC]

USDC is a common project between Coinbase and Circle. Its supply should be more legit.
Here is the chart.

image003.png

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. The marketcap for USDC in 2020 started with 0.5B and at the moment is almost 3B. A 2.5B USDC printed in 2020.

Dai [DAI]

DAI is the decentralized version for stablecoin. Its run as a smart contract on Ethereum. Everyone can use the Maker protocol, deposit collateral and generate DAI as a loan.

image005.png

DAI started even later than USDT or USDC. The current version of DAI (multilateral) stared in January 2020. From what I 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 and its almost a 1B now in less than a year existence of the current version. Unlike the USDT and USDC, 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 😊.

Binance USD [BUSD]

The Binance exchange stablecoin. Its mostly used on Binance as well as a trading pair against other cryptos.

image007.png

Again, here we are seeing a sharp increase in supply for BUSD in 2020. A 0.8B supply now, from almost non excitant supply at the begging of 2020.

Cumulative stablecoins market cap

When we add all the coins above we get this.

image009.png

Obviously, Tether [USDT] is a dominant player in the sector with 16B market cap at the moment.
But we can see that other stablecoins have appeared in the last year or two and they are now also growing at a fast rate.
USDC with almost 3B in marketcap is on the second place followed by the decentralized stablecoin DAI.

What is clear from the above is that all the stablecoins have grown a lot in 2020.
The stablecoins printers have went brrrr even more than the USD one in 2020.
The cumulative marketcap for them have went from 4.8B at the begging of 2020 to a 21.4 currently. This is more than x5 increase in marketcap. Actually the stablecoin market cap has experience one of the biggest growth in the industry. Neither Bitcoin or Ethereum has increased their market cap by x5 in 2020. At least not yet 😊.

With 21.4B in market cap stablecoins now represent 5% of the total market cap of the industry.

image011.png

With so much capital laying on a side thing should get interesting going forward.

All the best
@dalz

Posted Using LeoFinance Beta