Stablecoins remain strong in the cryptocurrency market despite the harsh crypto winter and the various challenges facing the crypto sector globally.
Stablecoins are showing their strength and relevant role in the cryptocurrency market, having performed well over the last 7 days (as we are already in the middle of September). A good sign that accompanies the recovery of the cryptocurrency markets this September, where we saw the price of Bitcoin break the €23.000 barrier and recover the €26.000 level.
In fact, the lowest point of the month was on September 11, when BTC was at €23.333. And, while it is not the lowest point for BTC this year (that place is still occupied by January 1, 2023, with a BTC value of €15.400) it leaves us with a clear message: Bitcoin's value recovery this year has been generally positive.
This situation is reflected in the numbers of stablecoins. In the last 7 days of September, all of them have been in the green, with a general operating volume of over 125 billion dollars. This clearly shows the resilience of stablecoins in the face of the changes currently taking place in the crypto market. A resilience that is mainly being exploited by players in the DeFi world.
A timid growth
But not only is the message of resilience from stablecoins, they have also given a message of growth. Tokens such as USDT (Tether) and USDC have grown by 0,3 and 0,7% respectively. These are rather timid numbers, but compared to their capitalization and maximum circulation, we are talking about Tether having grown by more than a billion so far in September. For its part, USDC has maintained its numbers, since the stablecoin suffered a hard drop in capitalization on September 7, and the growth generated has only allowed it to recover from that event.
However, DAI has been the stablecoin that has surprised the community the most with its negative performance. The stablecoin designed by MakerDAO has fallen by 1,1% compared to the data reflected 30 days ago, currently standing at $3.840 billion.
The decrease in its issuance is clearly reflected in the drop in the DeFi TVL of MakerDAO, which has seen a 7,13% drop over the past 30 days. Despite this, MakerDAO still holds strong as the second-largest DeFi ecosystem, only behind LIDO.
Of course, the overall numbers for other stablecoins have also been reflected in DeFi, whose overall TVL has risen from $37 billion (as of August 31, 2023) to $38,515 billion at the time of writing.
Although the numbers are far from those experienced in 2021 and 2022, the fact that the ecosystem has remained stable is a good sign for all players in this sector.
At this point the actor that has surprised everyone the most is FDUSD or First Digital USD. The Ethereum/BNB Chain ecosystem’s newest stablecoin has seen the most significant growth, up 52,7% over the 30-day period. Deployed in May 2023, FDUSD has gone from nothing to representing a market of over $360 million.
Created by Hong Kong-based First Digital Group, the new stablecoin has entered the scene with a clear vision of bringing stability and utility to crypto enthusiasts around the world. Thanks to this, it has made significant progress in achieving its goals in a remarkably short time – growth that could accelerate once it starts to be integrated into DeFi protocols.
Making clear the usefulness of stablecoins
All of the above shows us the relational balance of stablecoins with the crypto world in general and the DeFi ecosystem. Since they are designed to maintain a stable value, generally linked to a fiduciary currency such as the US dollar, players in both ecosystems seek to take advantage of stablecoins to minimize the risks of volatility associated with other cryptocurrencies, a smart strategy that seeks to reduce risk.
In the world of decentralized finance (DeFi), stablecoins are an essential tool for cryptocurrency trading, and for carrying out tasks such as lending, which also have a huge weight in this sector. Thus, the impact of stablecoins in the crypto and DeFi world has been significant, as they have opened up new possibilities in the cryptocurrency sector.
Furthermore, they have also increased the adoption of cryptocurrencies by the general population, as they are a more accessible and less risky way to participate in the cryptocurrency market. In short, stablecoins have been a valuable addition to the cryptocurrency and DeFi ecosystem, and are likely to remain a significant part of the market in the future, so studying and appreciating their evolution is critical to understanding their evolution.
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