Stablecoins are very intriguing assets in the cryptocurrency industry. While they facilitate the conversion from fiat to cryptocurrency, they also have a strong influence on trading volumes and prices. It is somewhat surprising to see several major stablecoins note lows across different metrics.
Several Lows For USDC
As one of the top stablecoins on the market, USDC has noted significant growth throughout 2020 and early 2021. That growth will eventually hit the ceiling, as is evident when looking at the median transaction volume. A median volume of $1,789.6 is still more than acceptable when looking at the bigger picture, yet it represents a one-month low. Not an alarming low, but still a strong decline since the peak in early March 2021.
Interestingly, this decline in USDC appears to coincide with the recent pullback all significant crypto assets have gone through. Bitcoin has looked relatively feeble since hitting its recent all-time high. Even today, that market notes strong bearish pressure for no apparent reason. For years, it has been speculated how stablecoins directly affect Bitcoin, Ethereum, and others. With a monthly low in median transaction volume, there may not be any recourse just yet.
Contrary to what some may think, the growth of USDC is not stopping entirely. More specifically, there is a three-month high for new addresses, confirming this pegged asset remains attractive to users, investors, and speculators. It is also interesting to note this metric notes a low point in late 2020, then peaked, dropped again, and now continues to grow steadily.
Although some people may see 645.661 new addresses – as a seven-day moving average – as nominal growth, it is still significant. Stablecoins continue to open gateways for people who are not familiar with cryptocurrencies yet. Their success will – partially- determine the growth curve of the broader industry.
Other Stablecoins Struggle Too
The issues outlined above are not unique to USDC either. Looking at the other stablecoins on the market, there is a clear decline in transaction volume for BUSD. It too has hit a monthly low, confirming interest in this asset may be waning a bit. Although a volume of $32.6 million is still more than sufficient, it confirms investors and traders are cooling off on stablecoins lately.
Going one step further, the DAI liquidity on Uniswap is struggling as well. A three-month low of $106.4 million is in the books. To some, that may seem like a good thing, yet it remains unclear how this liquidity shift will affect the top decentralized exchange. A decrease in DAI liquidity can have some unexpected yet intriguing consequences.
Overall, it would appear as if global interest in stablecoins is hitting a low for the time being. That is not entirely surprising, as all markets have been subdued for a while now. The momentum can still pick up on a dime, as this industry never settles into a groove for long.