Is the stablecoin market witnessing a revival?

  • Despite past turbulence, the stablecoin market was experiencing renewed activity and optimism.
  • Both Tether and Circle’s new endeavors could help sustain the stablecoin growth further.

In the early months of 2023, the stablecoin sector faced turbulence due to the SVB bank troubles. However, recent data indicated a resurgence in activity and optimism within the stablecoin market.

Growing Activity of USDC and USDT

Despite being less active when analyzing historical market behavior, stablecoin (SC) activity, especially for USDC and USDT, has shown significant growth concerning the size of SC holdings compared to peak market values. This trend provided insights into both retail and institutional flows of stablecoins.

In terms of trading volume, USDC took the lead in the stablecoin sector. At press time, it accounted for 47.9% of all stablecoin trading activity. Conversely, USDT led in market capitalization and supply growth according to Dune Analytics’ data.

Screenshot 2023 09 05 at 12.12.34 PM

Source: Dune Analytics

USDC’s potential for growth

Despite facing challenges in increasing its market capitalization, USDC may experience growth following its recent collaboration with the Cosmos network. Noble, an appchain designed for native asset issuance in Cosmos, will facilitate easy and secure access to USDC issued on Noble through the Inter-Blockchain Communication (IBC) ecosystem.

This move will make USDC native to the Cosmos network via Noble, establishing it as the official form of USDC for the Cosmos ecosystem. The integration aims to proliferate native USDC liquidity across various Cosmos appchains, including platforms like dYdX and Osmosis.

Tether’s sustainable energy initiatives

Meanwhile, Tether is actively working on renewable energy mining for Bitcoin, a move that could positively impact sentiment surrounding stablecoins associated with the company. Tether Energy is forging partnerships worldwide with local companies, offering capital, infrastructure support, development expertise, and general support to establish renewable energy production and Bitcoin mining facilities.

These initiatives not only align with the growing focus on sustainability within the cryptocurrency space but also signify Tether’s commitment to environmentally friendly practices, potentially attracting environmentally conscious investors and users to its stablecoin offerings.

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