With so many different stablecoins on the market, competition is bound to emerge. Although Tether’s USDT remains the most prominent asset, DAI and USDC keep making moves. Judging by these numbers, 20021 may prove to be an exciting year.
USDT Supply on Ethereum Stagnates
No one can argue about USDT as the leader among stablecoins. It has a market cap of over $19.7 billion, distributed across multiple blockchains. Tapping into different blockchains has proven to be a recipe for success. The initial issuance on the OMNI chain has almost come to a halt entirely. It is the least favorable option for the time being.
When it comes to Ethereum, it seems to be the most active chain for USDT issuance. Currently, there is over $12.37 billion worth of USDT on Ethereum’s chain. Many see this blockchain as a facilitator for all significant stablecoins. Especially when Ethereum 2.0 goes live, the throughput of the network will increase significantly.
However, this issuance “growth rate” is seemingly slowing down. Although there are still USDT issued on Ethereum, just $100 million has been added in the past ten days. Such a rate is much slower than earlier in 2020. That said, there is a stagnation visible on the chart in May of this year as well. This pattern is possibly repeating itself, for reasons unknown.
Even with this temporary halt in issuance, it is a matter of time until USDT surpasses the $20 billion market cap. Doing so will ensure it remains the biggest of all stablecoin on the market. Maintaining that lead will not be an easy task. Both DAI and USDC note a healthy growth rate. Diversification is crucial, even where stablecoins are concerned.
Competing Stablecoins: DAI and USDC
Looking beyond the current state of USDT, two other stablecoins note a strong performance in 2020. DAI, the “native” stablecoin of the Ethereum network, is en route to surpassing $800 million in market cap. In early January, it had a market cap of just over $42 million. The rise in popularity of DeFi is undoubtedly a contributing factor for DAI. Without decentralized finance, neither of these three stablecoins would have seen explosive growth.
Another pegged asset worth keeping tabs on is USDC. Although this stablecoin got off to a relatively slow start, things continue to improve gradually. Its market cap has risen from $459 million to nearly $3.25 billion over the past 12 months. Such a growth rate is very similar to DAI, even though their market capitalizations are different from one another.
Keeping in mind how all stablecoins combine for a market cap of $26 billion, there is room for further competition. These currencies generate nearly $40 billion in daily trading volume, which is lower than a few weeks ago. The year 2021 is bound to get very interesting where these fiat-pegged currencies are concerned. More competition for market dominance will ultimately benefit all enthusiasts and traders.