First Digital USD soars on Binance as overall stablecoin market sinks to two-year low
Tether's USDT supply, for example, contracted for the first time since last October.
The total market cap of stablecoins has been on a continuous decline for 17 months, now standing at $124 billion, its lowest level since August 2021, according to CCData.
The data aggregator highlighted a broader impact of the decline in stablecoin’s monthly trading volume. Notably, July saw this volume plummet to its second-lowest point this year, at $453 billion.
CCData attributed this significant downturn to the subdued market dynamics observed in Bitcoin and Ethereum. These two major cryptocurrencies have experienced an unusual period of reduced volatility, reaching levels not seen in multiple years.
The firm continued that the trend could continue into August. However, it noted that the myriads of spot ETF applications before the U.S. Securities and Exchange Commission (SEC) could catalyze the market.
In July, a Binance spokesperson told CryptoSlate that the firm was pushing the asset because it believes its customers would benefit from more stablecoin choices in the market. Since then, the exchange has introduced several features designed to incentivize its usage on the platform.
USDT supply declines
Meanwhile, USDT’s supply declined for the first time since last October by 0.62% to $83.3 billion as of the end of July. However, it remains the dominant stablecoin in the space, with its market dominance currently at 67.16% as of press time.
Tether’s USDT has been one of the best-performing digital assets in the current year, with its supply rising to an all-time high amid the issues plaguing its rivals like BUSD and USDC.
Across other stablecoins, CCData stated that USDC’s supply fell for the eighth month to $25.8 billion, while BUSD and TrueUSD’s (TUSD) market plunged to $3.37 billion and $2.75 billion, respectively.