Stablecoins win 60% of crypto volume as soaring coins lure bets on reliability

Stablecoins accounted for more than half of all daily trading volume among the most traded cryptocurrencies Monday.

Tether, First Digital USD, and USDC each clocked around $58 billion, $7.5 billion and $7.1 billion, respectively, CoinGecko data shows.

Collectively, these three stablecoins made up more than 60% of the trading volume of the five most traded cryptocurrencies that day. Bitcoin reached about $34 billion, while Ethereum saw $20 billion.

Stablecoins “have attracted the most capital, emphasising investors’ inclination towards stability and reliability over other alternatives,” Vincent Chok, CEO of First Digital, told DL News.

Stablecoins are cryptocurrencies with values typically pegged to fiat currencies like the US dollar. They provide an avenue for traders to park their funds during highly volatile periods.

“Stablecoins are an extremely crucial asset for traders both from a stability perspective and a leverage perspective,” Pat Doyle, a blockchain researcher at Amberdata, told DL News.

Capital flowing in

Stablecoins allow traders to manage and amplify their trading positions efficiently. By using stablecoins as collateral, traders can borrow additional funds to increase their investment size, potentially magnifying their profits or losses.

They’re also highly liquid, meaning they can be quickly converted into other cryptocurrencies or used for transactions.

Doyle pointed to the issuance of stablecoins as a measure of new capital flowing into the cryptocurrency market, which has topped $3.5 billion this year.

That represents a growth of about 5% compared to the total market value of stablecoins seen at the start of 2024.

Trade activity has so far pushed the total combined stablecoin market value to its highest peak since December 20, 2022, above $140 billion, according to DefiLlama data.

Growth in the creation and distribution of stablecoins “indicates confidence in the segment and shows new dollars onchain,” Doyle said.

Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.