The market cap of Tether’s USDT token fell 1.2% to $82.9 billion in August, according to researcher CCData. That’s still three times larger than its closest competitor. Stablecoins are crypto tokens that are usually pegged one-to-one to an asset such as the dollar and are mostly used in trading and to move digital assets between exchanges.
“This ongoing decline reflects not just low trading volumes on centralized exchanges but also a reduced activity in the DeFi space,” said Jacob Joseph, research analyst at CCData. The shifting market dynamics has led to pronounced changes in stablecoins. The Binance-branded BUSD stablecoin is slowly being taken out of usage, following a US regulatory crackdown. Meanwhile, Tether’s biggest competitor, Circle’s USDC token, has lost about half its market share in the past year in the wake of turmoil at Silicon Valley Bank, which held reserves for the Boston-based firm. USDC was little change in August at around $26 billion.
Even with the recent crypto industry turmoil, there are signs that the stablecoin sector may have bottomed out, Joseph said. The total market capitalization hit a low of $123 billion on Aug. 19 but has risen since.