Stablecoin Market Cap Down $10 Billion From May Peak, Long-Term Growth Seen Intact
Summary
- Total market capitalization of stablecoins has fallen by about $10 billion, or roughly 3%, from its May peak, but CoinDesk said the pullback remains modest compared with the 2022 bear market.
- The decline was concentrated in Tether (USDT) and Circle (USDC), and CoinDesk said shrinking stablecoin supply could weigh on crypto-market liquidity.
- Some smaller stablecoins, including Global Dollar (USDG) and USDGO, are growing instead, suggesting the long-term growth trend may remain intact if new demand and issuer competition continue.
Forecast Trend Report by Period
The stablecoin market has shed about $10 billion since its peak in May. Even so, the decline is not severe enough to derail the sector’s long-term growth trend, according to market participants.
CoinDesk reported on July 13 that total stablecoin market capitalization fell by $7.7 billion in June alone. It was the biggest monthly decline since May 2022, when the Terra-Luna collapse hit the market.
Data from RWA.xyz show total stablecoin supply has dropped by about $10 billion from its May high, a decline of roughly 3%. CoinDesk said that pullback remains modest compared with the 2022 bear market, when the stablecoin market shrank by more than 26%.
The drop was concentrated in Tether’s USDT and Circle’s USDC. USDT’s market capitalization fell to about $184 billion from $190 billion in May, while USDC declined to about $73 billion from a peak near $80 billion in March.
Stablecoins are widely used as the base currency for crypto trading. Their use in payments and settlement is also expanding, making supply changes a gauge of liquidity entering or leaving the digital-asset market.
Still, Paul Howard, senior director at Wincent, said the recent decline in stablecoin market capitalization was a relatively small correction within what the firm sees as a long-term growth market.
Short-term liquidity swings are normal and do not change that view, he added, saying stablecoins will play an increasingly important role in the digital-asset ecosystem.
Changes in the competitive landscape also appear to have contributed. As U.S. regulation advances, including through the GENIUS Act, stablecoins are expanding beyond crypto trading into payments, and new issuers are entering the market.
While USDT and USDC supply has fallen, some smaller stablecoins have grown. Global Dollar, or USDG, issued by Paxos and supported by a consortium that includes Robinhood, has surpassed $3.2 billion in circulation. USDGO, issued by Anchorage Digital and Hong Kong-based OSL Group, has nearly doubled to about $900 million.
CoinDesk said increases in stablecoin supply have historically accompanied bull markets. While a decline in overall supply could weigh on liquidity in the crypto market, the longer-term growth trend may hold if new demand and competition among issuers continue.
