Bitcoin is considered to be the king of cryptocurrencies – and rightfully so: BTC is responsible for half the market capitalization of the crypto spac
e. However, when it comes to utilization, the biggest crypto asset in the world does not win. Instead, the assets that are ruling this space happen to be none other than stablecoins.enabled the option of using USD to buy and sell cryptocurrencies, stablecoins were used as the medium. Over time, their utility reduced, but the demand for these stable assets has seemingly not declined as much.
Carter pointed out that stablecoins collectively are only responsible for a little over 10% of the crypto market capitalization. The total crypto market cap of $1 trillion only has about eight stablecoins in the top 100 crypto assets list. Of this $1 trillion, nearly 50% is contributed by Bitcoin alone, which has a market cap of more than $519 billion.However, Carter noted that despite such a huge difference in overall value, the utilization differs rather starkly.
Close to 70% of the on-chain transaction volume is dominated by these five stablecoins, along with a few other small-cap stablecoins. The remaining 30% of the transaction volume is split into BTC, ETH and other layer-1 tokens.Despite the decline in crypto volume and activity, these stablecoins have maintained a robust demand, so much so that their annual volume is closing in on that of credit card company Visa. This is in spite of the fact that stablecoins were launched less than six years ago.
Interestingly, Visa also adopted these crypto assets, with the settlement of interbank transactions set to be conducted in USDC beginning this month. However, looking at the larger picture, the broader market conditions have left these assets in a struggle. Demand has seen a drop-off since mid-2022, with the market capitalization of stablecoins falling by 20% from $165 to $131 million over the past year.
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