Ethereum

Reserve

Patrick

Chair

Read

<div class="cryptonews"> 
 <p class="is-style-lead">Tether, the world’s largest stablecoin, experienced its first market cap dip in nine months, according to CCData. This decline comes as the stablecoin ecosystem undergoes significant changes, reshaping crypto market dynamics.</p> 
 <h2 class="wp-block-heading" id="stablecoins-dip">Stablecoins dip</h2> 
 <p>Tether (USDT), a highly controversial digital asset in the Web3 space, recently faced a setback. In August, its <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> capitalization dropped by 1.2%, settling at $82.9 billion, as reported by CCData. Although this marks the first decline in almost a year, Tether still maintains a substantial lead over its closest competitor, USDC.</p> 
 <p>Stablecoins are digital assets typically tied to fiat currencies like the dollar. They serve primarily for trading and asset transfers within exchanges.</p> 
 <p>The overall stablecoin market shrank for the 17th consecutive month, decreasing by 0.4% to approximately $125 billion, according to CCData.</p> 
 <p>Trading volumes in the larger $1 trillion digital asset market also decreased, influenced by rising interest rates, tighter regulatory scrutiny, and waning investor enthusiasm due to the long-standing crypto winter.</p> 
 <p>Despite its latest decline, USDT continues to reign as the most traded cryptocurrency globally.</p> 
 <p>The report notes that the <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> decline is not entirely due to reduced trading activities on centralized exchanges, as the decentralized finance (DeFi) sector also experienced decreased activity. </p> 
 <h2 class="wp-block-heading" id="changing-market-dynamics">Changing market dynamics</h2> 
 <p>Market dynamics have precipitated notable shifts in the stablecoin ecosystem. The Binance-branded BUSD stablecoin is gradually falling out of favor due to heightened U.S. regulatory scrutiny.</p> 
 <p>In the same vein, Circle’s USDC token, Tether’s primary competitor, has relinquished roughly half of its market share over the past year, influenced by turmoil at Silicon Valley Bank, its reserve holder.</p> 
 <p>In Aug., USDC’s <a rel="noopener noreferrer nofollow" title="market" href="https://thebittimes.com/tag/market.html">market</a> cap remained relatively unchanged at around $26 billion. First Digital Group’s newly introduced FDUSD <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a> is gaining ground, partly through incentives offered to Binance customers as they transition away from BUSD.&nbsp;</p> 
 <p>Despite recent turbulence in the crypto industry, there are signs hinting at a potential bottom for the stablecoin sector. The combined total market capitalization of stablecoins reached a low of $123 billion on Aug. 19, but has since rebounded.</p> 
 <h2 class="wp-block-heading" id="promising-signs-amidst-the-gloom">Promising signs amidst the gloom</h2> 
 <p>Towards the end of Aug., there was an upturn in the stablecoin sector. PayPal Holdings Inc. launched its stablecoin, a strong indication that institutional interest in stablecoins remains hot.</p> 
 <p>In other positive news, the recent favorable court ruling appeared to have paved the way for Grayscale to transform its GBTC Bitcoin Trust into an exchange-traded fund supported by physical Bitcoin (BTC)</p> 
 <div class="cn-block-related-link"> 
  <svg class="cn-block-related-link__icon icon" aria-hidden="true"> <use xlink:href="#"></use> 
  </svg> <span class="cn-block-related-link__prefix"> You might also like: </span> Hong Kong’s scholar backs HKD stablecoin to take on USD and USDT 
 </div> 
 <h2 class="wp-block-heading" id="ethereum-rising">Ethereum rising</h2> 
 <p>In the ongoing race for stablecoin dominance, industry experts have shifted their focus to Ethereum (ETH), the world’s number one smart contracts blockchain.&nbsp;</p> 
 <p>&nbsp;Ethereum’s growing dominance is underscored by key network adoption metrics and the emergence of layer-2 projects like Optimism, Arbitrum, and Base.</p> 
 <p>On another front, U.S. Republicans have accused the Federal Reserve of hindering Congress’s efforts to regulate stablecoins, potentially discouraging banks from venturing into the digital asset space.&nbsp;</p> 
 <p>Rep. French Hill, Bill Huizenga, and Patrick T. McHenry have also penned a letter to Federal Reserve Chair Jerome Powell, alleging that the central bank is impeding <a rel="noopener noreferrer nofollow" title="stablecoin" href="https://thebittimes.com/tag/stablecoin.html">stablecoin</a> regulation.</p> 
 <div class="cn-block-related-link"> 
  <svg class="cn-block-related-link__icon icon" aria-hidden="true"> <use xlink:href="#"></use> 
  </svg> <span class="cn-block-related-link__prefix"> Read more: </span> Bankrupt lender, BlockFi, files to convert ‘trade-only’ tokens into stablecoins 
 </div> <span class="google-news-banner__label">Follow Us on Google News</span> 
</div> 
<p>Source: <a rel="noopener noreferrer nofollow" target="_blank" href="https://thebittimes.com/tether-market-cap-slips-as-stablecoin-ecosystem-shifts-tbt61365.html">https://thebittimes.com/tether-market-cap-slips-as-stablecoin-ecosystem-shifts-tbt61365.html</a></p>

Tether market cap slips as stablecoin ecosystem shifts

Table of Contents

TheBitTimes

Other articles published on Sep 3, 2023

Ethereum Founder Vitalik Buterin Makes Mystery Move With Large ETH Transfer

French Authorities Visit Worldcoin’s Office Amid Data Privacy Concerns

Analysts Explain High Correlation Between Bitcoin Miners’ Sales and BTC Price

The Best Crypto Tutorials for Mastering the Basics / Issue 6

Spot Bitcoin ETFs Gaining Momentum after Grayscale’s Court Triumph

Cardano (ADA) Price Analysis for September 3

Join our free newsletter for daily crypto updates!