The amount of the three leading stablecoins corresponds to 12% of the total crypto market capitalization, a historically high level. A reduction in inflation will allow retail traders to have enough money to invest in high-risk assets like cryptocurrencies.
Many analysts had forecast that the crypto market would stabilize without suffering a final capitulation event. A high amount of stablecoins will re-enter the markets when the right time comes.
There are three stablecoins among the top 10 crypto assets by market capitalization whose combined value is above USD 138 billion. Tether (USDT) has USD 65.9 billion, USD Coin (USDC) USD 54.5 billion, and Binance USD (BUSD) USD 17.9 billion.
Changpeng Zhao recently stated that much fiat money was sitting on the sidelines, waiting to return. He said those wanting to leave the crypto market would not hold stablecoins.
Those Leaving the Crypto Market Turn Back to Fiat Money
If people needed to leave cryptocurrencies, they would revert to fiat money and withdraw from trading. In mid-June, more than USD 400 billion got out of the market in one week.
The overall crypto market has been within a limited range, with a recent rally to push capitalization to USD 1.17 trillion. That is equivalent to 33% of its all-time low cycle of USD 875 billion.
The amount of the three leading stablecoins corresponds to 12% of the total crypto market capitalization. Despite a decline due to the adjustment in the Tether supply and the slight market rally, it is still historically high.
Since inflation has caused a cost-of-living crisis, retail traders do not have enough money to invest in high-risk assets like cryptocurrencies. The crypto markets will not become bullish unless the economic situation improves.
Those countries that view the US dollar as a hedge against inflation think stablecoins are a solution. Those fiat-pegged crypto assets are in high demand in several Latin American nations with double-digit inflation.
Crypto Markets Cool Down after a Consolidation Weekend
Following a consolidation weekend, total market capitalization suffered a slight decline during the latest Asian trading session. While writing this article, the markets have dropped by 1.2% to USD 1.13 trillion.
The leading cryptocurrencies, Bitcoin (BTC) and Ether (ETH), are trading at around USD 23,323 and USD 1,687, respectively. Meanwhile, most altcoins are red after some have suffered double-digit percentage losses.
The Performance of the Three Leading Stablecoins
Tether (USDT) has accumulated a gain of 0.6% over the last 24 hours and 0.1% over the past week. Its daily trading volume is above USD 49.17 billion, while its market capitalization is about USD 65.92 billion.
USD Coin (USDC) has accumulated a 0.3% loss over the last 24 hours and a 0.2% gain over the past week. Its daily trading volume is above USD 5.94 billion, while its market capitalization is about USD 54.41 billion.
Binance USD (BUSD) has accumulated a 0.6% loss over the last 24 hours and a 0.4% gain over the past week. Its daily trading volume is above USD 6.22 billion, while its market capitalization is about USD 17.98 billion, according to CoinGecko.
By Alexander Salazar