The market capitalization of stablecoins surpassed its 2022 all-time high of $187 billion. Now, this particular market is entering uncharted territory and rapidly approaching the $200 billion mark.
It took just over two years for the stablecoin sector to recover from the blow of Terra’s collapse. It should be remembered that this network had a token linked to the United States dollar. This is the infamous UST, which was an algorithmic currency whose parity was not supported by equivalent dollar reserves. Contrary to this, its parity with the USD was based on a complex system involving the LUNA token.
The LUNA token, for its part, also enjoyed great advantages such as a burning program that projected its price enormously. The demand for these two coins guaranteed the impossibility of a UST stablecoin disparity. The latter offered huge returns of over 20%, which made it a sensation.
However, some analysts warned that the algorithmic foundation would not withstand a bear market. Given the first symptoms of winter 2022, the spiral occurred. Since then, the market capitalization of stablecoins has plummeted. Finally, a few hours ago that stage was overcome.
Capitalization of stablecoins surpasses the highs of the Terra era. Source: Bloomberg
Stablecoin market capitalization is close to $200 billion
At the time of writing, data from CoinMarketCap shows that the capitalization of stablecoins is $196 billion. The prospect is that this brand will be left behind very soon. This is due to the sector’s projections of breaking its current boundaries.
Since they were created, these particular tokens have fulfilled the function of mediating conversions between different virtual currencies. Likewise, they are presented as useful tools to escape volatility without having to go out into the fiat world. However, another function will be added shortly: cross-border payments.
Large companies in the sector such as Tether, the issuer of USDT, are preparing to become international payment agents. Likewise, other firms such as Stripe have plans to enter this sector. Specifically, Stripe is preparing to acquire Bridge for $1.1 billion to strengthen its entry into the field of electronic payments with stablecoins.
Other renowned companies like Ripple and PayPal are also ready to claim prominence in this particular sector. As can be anticipated, the $200 billion in stablecoin market capitalization seems like a modest mark if the projections mentioned above come true.
For now, this market is presented as a sector of almost total dominance of Tether’s USDT, which controls 70% of the capitalization. However, new use cases could make this market a more varied one with less of the appearance of a monopoly.
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