Wednesday, November 30

Stablecoins grew 574% in 2021

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 USDT grew more than 50 times since January 1st of this year.

This growth can be associated with the heated market of 2021 that caused not only Bitcoin, but several other currencies, to break historic highs this year. Furthermore, it is worth noting that decentralized stablecoins were not left behind in this race, quite the contrary.

Tether is still the biggest stablecoin

With a 3.66-fold growth compared to its offer earlier this year, Tether (USDT) remains the largest stablecoin on the market. Despite this, she also remains the target of accusations due to the lack of transparency regarding her reservations.

Perhaps because of this, 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, USDT, 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, after all their issuers act almost like a bank. Thus accelerating its intentions to create CBDCs, digital currencies of central banks.

Decentralized stablecoins also grew

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 them all. 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.

Finally, it is worth remembering that even WhatsApp is using stablecoins. Earlier this month, the world’s most popular messenger introduced the 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.