Jamal Al-Farouq The stablecoin sector has seen little activity in recent months, hovering just above the $123 billion threshold as we enter the third week of October. Despite a surge in trading volume for fiat-pegged tokens on October 13, stablecoins accounted for only 22.96% of the worldwide cryptocurrency trading volume on that day. The day prior, they made up a significantly higher 74% of all trading activities.
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Market Instability? Variations in Stablecoin Valuations and Trading Volumes
During the last four weeks, the fiat-pegged token market has faced multiple challenges. Tether (USDT) has seen a slight increase in its circulating supply by 0.5%. In contrast, USD Coin (USDC) underwent a 4.3% decrease in its reserves. DAI, the market’s third-largest stablecoin, faced a 1.3% reduction, while TrueUSD (TUSD) experienced a 6.5% increase. Furthermore, Binance USD (BUSD), which ranks fifth in market capitalization, suffered a significant 15.5% supply contraction.
Currently, the market capitalization of BUSD is precariously balanced at around $2.13 billion, threatening to fall below the $2 billion mark. Over the same period, Tron’s USDD remained stable, and FRAX recorded a modest 0.5% growth. On the other hand, Pax Dollar (USDP) lost 7.2% of its circulating supply. First Digital USD (FDUSD), a new entrant, saw its supply grow by an impressive 18.7%. As of October 13, 2023, Paypal’s newly launched stablecoin has already become the 13th largest by circulation, with 119 million in supply.
On the morning of October 13, the global trade volume stood at $62 billion, with stablecoins contributing just 22.96%. This is a significant drop from the 74% contribution observed on October 12. That same evening, the total value of the stablecoin market momentarily fell below $123 billion, and the global trade volume dropped to $34.13 billion. In other developments, Tether has announced a change in its executive team this week. Paolo Ardoino, formerly the CTO, will take on the CEO role in December, replacing Jean-Louis van der Velde, who will become an advisor to the company.
Shifting Equilibrium: USDR Departs from Dollar Peg
In another noteworthy event, USDR, a lesser-known stablecoin managed by Tangibledao, has seen its value plummet, now trading at 50% of its former $1 parity. The stablecoin lost its peg on October 11 and has yet to recover. Although Tangibledao has addressed the situation through a social media post on platform X, the post is private, restricting any public discourse. Consequently, USDR has joined the expanding list of fiat-pegged tokens that have failed to maintain their peg to the U.S. dollar.
We invite you to share your insights and viewpoints on the recent developments in the stablecoin market in the comments section below.
Frequently Asked Questions (FAQs) about Stablecoin Market Volatility
What are the main developments in the stablecoin market as of October 2023?
The significant developments include Tether’s announcement of a CEO transition, fluctuations in the supply of various stablecoins like USDC, DAI, and BUSD, and the depreciation of a relatively obscure stablecoin, USDR.
What changes are expected in Tether’s leadership?
Paolo Ardoino, who previously served as the Chief Technology Officer of Tether, is slated to become the CEO in December. Jean-Louis van der Velde, the current CEO, will transition to an advisory role.
How have stablecoin valuations fluctuated recently?
Tether (USDT) saw a modest 0.5% increase in supply, while USD Coin (USDC) and DAI experienced cuts in their supplies by 4.3% and 1.3% respectively. TrueUSD (TUSD) saw a 6.5% increase, and Binance USD (BUSD) faced a significant 15.5% reduction.
What is the current status of Binance USD (BUSD)?
As of now, BUSD’s market capitalization is around $2.13 billion, and there is a possibility that it may fall below the $2 billion mark.
What happened to the stablecoin USDR?
USDR, managed by Tangibledao, lost its dollar peg and is currently trading at half its previous value of $1. Although the team addressed the issue via a social media post, the post remains private, hindering public discourse.
How have stablecoins contributed to the global crypto trading volume?
On October 13, stablecoins made up 22.96% of the $62 billion global trade volume. This is in stark contrast to their 74% contribution to the trading volume on October 12.
What is the significance of Paypal’s new stablecoin?
As of October 13, 2023, Paypal’s newly introduced stablecoin has become the 13th largest by circulation, boasting a supply of 119 million.
What happened to other stablecoins like FRAX and Pax Dollar (USDP)?
FRAX saw a subtle 0.5% growth in its supply, whereas Pax Dollar (USDP) faced a 7.2% reduction.
How can one stay updated on the developments in the stablecoin market?
One can stay updated by following financial news platforms, monitoring social media announcements from stablecoin organizations, and participating in financial forums and discussions.
More about Stablecoin Market Volatility
- Tether’s Leadership Transition Announcement
- Recent Stablecoin Market Analysis
- USD Coin (USDC) Supply Changes
- DAI Supply Fluctuations Report
- Binance USD (BUSD) Market Capitalization
- USDR’s Dollar Peg Loss Update
- Global Crypto Trading Volume Statistics
- Paypal’s New Stablecoin Introduction
- FRAX and Pax Dollar (USDP) Supply Changes
8 comments
Honestly the stablecoin market never ceases to amaze. One day it’s all stable and the next thing u know, boom! Everything changes.
fluctuating stablecoin supplies and CEO changes? lots happening in a short time. More volatility ahead, I guess.
USDC and DAI taking a hit while TUSD goes up? The market’s really unpredictable these days. Keep up the good reporting, mate.
Tether’s CEO moving to an advisory role sounds like a strategic step. But will it be enuf to keep them on top. Thoughts?
Wow, Tether changing its CEO, that’s big news. Wonder how it’ll affect the market though. Stability is key right?
super interesting article. Especially about USDR losing its peg. Makes you question the long-term viability of some of these stablecoins, doesn’t it?
BUSD’s cap nearing $2 billion? now thats alarming. Should I consider moving to another stablecoin? any suggestions?
Good read but wanted more details on the Paypal stablecoin. Being 13th in ranking already is no small feat. Lookin forward to a follow-up article.