Thursday, November 30, 2023

Utilizing the most recent data available, the stablecoin sector witnessed a substantial outflow of $1.52 billion from September 1 to September 30, 2023. Among the top ten stablecoins, FRAX and BUSD experienced the most significant declines, with their total supply diminishing by 16.9% and 26.4% respectively, within that one-month period.

A Decline of $1.52 Billion in Stablecoin Capitalization Over One Month

The domain of stablecoins, primarily anchored to fiat currencies like the U.S. Dollar, continued its trend of contraction, settling just above a valuation of $123 billion as of the end of September 2023.

Historical data reveals that on the first day of September, the total market capitalization of the stablecoin sector was substantially higher, standing at $124.57 billion. This highlights a net loss of $1.52 billion in value over the course of the month.

Rankings of Top Eight Stablecoins as of September 30, 2023

Tether (USDT), the most capitalized stablecoin, saw its supply edge higher by 0.5%, closing the month with a market capitalization of $83.22 billion. This accounts for 67.65% of the entire stablecoin market, currently valued at $123 billion.

The second-largest stablecoin by market capitalization, USD Coin (USDC), observed a 4% decline in its supply over the previous month, settling at a market capitalization of $25.10 billion. Makerdao’s DAI also contracted, albeit by a more modest 2%, with its valuation standing at $3.81 billion.

In contrast, Trueusd (TUSD) exhibited an 18.6% increase in its supply over the past month, attaining a market capitalization of $3.44 billion. Among the top five stablecoins, TUSD emerged as the one experiencing the most significant growth.

Conversely, BUSD experienced a substantial reduction in its supply, shrinking by 26.4% and leaving it barely above the $2 billion mark with a valuation of $2.25 billion.

Tron’s USDD also experienced a marginal 0.6% increase, ending the month with a market capitalization just under the $1 billion threshold, at $726.87 million. Simultaneously, Frax Dollar’s (FRAX) supply experienced a notable decrease of 16.9%, plummeting to a market capitalization of $669.65 million.

Pax Dollar (USDP) was not immune to the contraction, shedding 3.8% of its supply. As the stablecoin sector hovers at $123 billion in total valuation, it finds itself at a level not encountered since September 2021, effectively reverting to a point two years prior.

We invite your expert commentary and analysis on the notable contraction of $1.52 billion in the stablecoin market during September. Please share your insights and viewpoints on this topic in the comments section below.

Frequently Asked Questions (FAQs) about Stablecoin contraction

What caused the $1.52 billion contraction in the stablecoin market in September 2023?

The $1.52 billion contraction in the stablecoin market can be attributed to redemptions and reductions in the supplies of various stablecoins, with notable declines in FRAX and BUSD.

How did Tether (USDT) perform in this contraction?

Tether (USDT) managed to increase its supply slightly by 0.5% in September, maintaining its position as the largest stablecoin with a market capitalization of $83.22 billion.

Which stablecoin saw the most significant growth during this period?

Trueusd (TUSD) experienced the most substantial growth among the top five stablecoins, with an 18.6% increase in supply, reaching a market capitalization of $3.44 billion.

What was the overall market value of the stablecoin sector by the end of September 2023?

The stablecoin sector’s total market value stood at just above $123 billion by the end of September 2023.

How does this market value compare to the beginning of September?

At the beginning of September, the stablecoin market had a higher valuation of $124.57 billion, highlighting a $1.52 billion loss in value over the course of the month.

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