Stablecoins, which serve as a funding source for many crypto trading strategies, are experiencing growth after months of stagnation in a sign of renewed capital influx into the crypto market.
The aggregate market capitalization of the stablecoin sector, which includes hundreds of coins, jumped to over $164 billion for the first time since thein May 2022, according to data source DefiLlama and trading firm Wintermute. It had been languishing around the $160 billion mark.These coins help investors mitigate market volatility because they maintain a fixed value to the external reference.
The price swoon is likely due to a"sell the fact" reaction to Tuesday's debut of the highly anticipated spot ether ETFs in the U.S. and the sharp slide in Wall Street's tech-heavy Nasdaq 100 index. The index fell 3.7% on Wednesday, wiping out $1 trillion in market value.in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin.