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Author: Win Win, Zhong Source: CoinGecko Translation: Shan Oppa, Bitchain Vision
A stablecoin is a token whose value is pegged to other assets, such as commodities or fiat currencies, to stabilize its price.By staying pegged to a specific fiat currency, asset, or commodity, most stablecoins essentially act as bridges between real-world assets and cryptocurrencies, representing them as tokens on the blockchain.
Since 2014, companies such as Tether and Circle have issued tokenized currencies backed by real-world financial assets such as bank deposits and short-term notes.Users can buy cryptocurrencies directly through these companies, converting real-world deposits into newly minted stablecoins.Instead, they can also convert stablecoins into fiat currencies.
However, not all stablecoins are entirely backed by tangible real-world assets.Decentralized stablecoins such as DAI and AMPL maintain their pegs through mechanisms such as over-collateralization or re-basement of crypto assets, allowing stablecoins to be minted without permission while maintaining their pegs without centralized entities.
The real value of a stablecoin is its ability to remain pegged at all times, even during market volatility.Unfortunately, many stablecoins fail this test.In this report, we cover everything from the type and total market value of stablecoins, the number of transactions to emerging stablecoin models.
5 highlights of the current status of CoinGecko stablecoin: 2024
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The market value of fiat-backed stablecoins soared to $161.2 billion in 2024, but is still below the peak of $181.7 billion in 2021
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In 2024, commodity-backed stablecoins grew 18.1% to $1.3 billion, accounting for only 0.8% of the fiat-backed stablecoins
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Stablecoins account for 8.2% of global cryptocurrencies’ market value, and their dominance continues to grow during a period of weak markets
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8.7 million addresses hold stablecoins, of which 97.1% hold USDT, USDC or DAI
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Stablecoins still struggle to maintain their peg stability, especially during uncertain times
1. The market value of fiat-backed stablecoins soared to $161.2 billion in 2024, but is still below the peak of $181.7 billion in 2021
The total market value of the top ten stablecoins pegged to fiat currencies has increased significantly since 2020.In the 2020-2021 bull market, it grew 3,121.7% from $5 billion at the beginning of 2020 to $181.7 billion in March 2022.The stablecoin market cap fell after Terra and its UST stablecoins collapsed before a reversal in November 2023.As of August 2024, the total market value of stablecoins pegged to fiat has increased by 35.4% from US$119.1 billion to US$161.2 billion.
The top three dollar stablecoins – Tether (USDT) (USD114.4 billion), USDC (USD33.3 billion) and Dai (DAI) (USD5.3 billion), account for 94% of the total stablecoin market value.Meanwhile, USDT continues to consolidate its dominance of 70.3%.Meanwhile, USDT continues to consolidate its dominance of 70.3%, while USDC’s share has been steadily declining since the March 2023 U.S. banking crisis.Stablecoins pegged to other currencies such as the euro, the yen and the Singapore dollar account for only 0.2% of the market share.
2. In 2024, commodity-backed stablecoins grew 18.1% to US$1.3 billion, accounting for only 0.8% of the fiat-backed stablecoins
As of August 1, 2024, the market value of commodity-backed stablecoins reached US$1.3 billion.Despite new entrants such as Kinesis and VeraOne, Tether Gold ( XAUT ) and PAX Gold ( PAXG ) still account for 78% of the market capitalization.Although commodity-backed stablecoins have risen 212 times since 2020 and 18.1% in 2024, they account for only 0.8% of the market value of fiat-backed stablecoins.
Precious metals are the go-to item for these stablecoins, but others have also been launched recently.The Uranium308 project has launched its own stablecoin, pegged to the price of U308 uranium compounds per pound.However, it was no longer active later.
3. Stablecoins account for 8.2% of the global cryptocurrency market value, and their dominance continues to grow during a period of weak markets
As of August 1, 2024, stablecoins accounted for 8.2% of the total market value of cryptocurrencies.In early 2020, stablecoins accounted for a much smaller proportion of the industry.At the beginning of 2020, they accounted for only about 2% of global market capitalization, but peaked at 6% at the beginning of DeFi’s rise.
Between November 2021 and May 2022, stablecoins’ dominance increased from 4.8% to 15.6% as Terra’s UST stablecoin grew exponentially.After its collapse, the stablecoin market share plummeted, and then in the subsequent bear market, the stablecoin market share soared to a high of 18.4%.
4. 8.7 million addresses hold stablecoins, of which 97.1% hold USDT, USDC or DAI
The top ten stablecoins have a total of 8.7 million holders, of which the top three stablecoins USDT, USDC and DAI account for 97.1%.USDT has the largest number of holders, with over 5.8 million wallets, 2.6 times more than its closest competitor, USDC.The number of holders in the other eight stablecoins is less than one million, while the number of holders in DAI is slightly higher than 505,000 wallets.
These stablecoins grew much faster in 2020, but grew sharply slowed in 2022 as bankruptcy concerns spread to other stablecoins after Terra collapsed.
5. Stablecoins are still difficult to maintain their peg stability, especially during uncertain times
In the past, stablecoins have struggled to maintain pegs, especially during periods of volatility.However, mature stablecoins such as USDT, USDC and DAI are now able to maintain their peg to $1.Due to uncertainty in Silvergate and Signature Bank deposits, stablecoins tend to be decoupled during volatile periods such as the banking crisis in March 2023.
Newer stablecoins, especially some algorithmic stablecoins, such as USDD, DAI and FRAX, tend to be more volatile and rely on market arbitrage to maintain the peg.However, there are also quite a few stablecoins failing, such as Iron Finance and Basis Cash, both of which fail to maintain the peg.
