Although stablecoins are rarely seen in the news, precisely due to the lack of change in their prices, it is important to note their growth this year, with greater use due to the high market.
On average, the eight largest stablecoins had a 574% growth in their market capitalization. Some like USDC had a growth of 10 times, while the Tether (USDT) grew more than 3 times since January 1st of this year.
This growth can be associated with the heated market of 2021 that caused not only Bitcoin, but many altcoins to break historic highs. Furthermore, it is worth noting that decentralized stablecoins were not left behind in this race.
Tether is still the biggest
With a 3.66x growth compared to earlier this year, Tether (USDT) remains the largest stable coin on the market. Tether also remains the target of regulators due to the lack of transparency regarding USDT reservations.
Because of USDT untrusty reserve situation, another stablecoin is gaining ground in the market. This year the USDC, managed by Circle and Coinbase, grew 10.9 times and already has 42 billion dollars in its reserves, half the size of the USDT, at 80 billion.
When we add up the supply of the eight largest stablecoins — USDT, USDC, BUSD, DAI, TUSD, USDP, and USDN — we see a growth of 574% this year.
Although they are mostly used for trading on exchanges, this growth is drawing the attention of governments seeking to protect their local currencies and also consumers of these stablecoins, because stablecoins issuers act like banks, so to counter these stablecoins governments around the world are accelerating their intentions to create CBDCs, digital currencies of central banks.
Even though this sector is dominated by centralized stablecoins, which depend on a central entity to issue these assets and manage reserves, it is important to note the growth of decentralized projects.
DAI, whose backing is kept in other cryptocurrencies such as Ethereum, grew 7.8 times this year, jumping from 1.2 billion to 9.3 billion coins. In other words, it grew more than the USDT and remained close to the USDC, which grew 10.9 times.
The TerraUSD (TUSD), called algorithmic stablecoin, had the highest growth among all Defi stable coins. Jumping from a measly 181 million to 9.94 billion in the last twelve months, the TUSD grew 54 times, about five times more than the DAI and the USDC.
It is worth remembering that even WhatsApp is using a stable coin. Earlier this month, the world’s most popular messenger introduced the Pax Dollar (USDP) into its app, allowing users to send money to each other using this currency.
Even though their prices are stable, and because of that they don’t appear so much in the media, stablecoins are a good indication of the market sentiment for cryptocurrencies, which had a great year in 2021.