2-5 Stablecoins Growth Trends in Q2 2021

Author: Footprint analyst, Bella in July 2021

In the crypto world, stablecoins are a key medium in the market. The most common one among them is USDT, which continues to lead trading by having the highest cap and volume of trades. Other notable ones such as USDDC and DAI have been gradually climbing up thanks to their potential benefits of being closely integrated into DeFi scenarios.

Using the Footprint platform, we have analyzed and interpreted the top 9 stablecoins with the dimensions of market capitalization and transaction volume. Here's what we found:

1.The market cap of stablecoins maintained a rapid upward trend in Q2 2021, reaching 107 billion by the end of the quarter, representing a 72.5% increase over Q1 2021. BUSD had the most significant increase, closely followed by USDC, DAI, and GUSD.

Market Cap of Top 9 Stablecoins Data source: Footprint

2.USDT continues to hold the lion's share of the stablecoin market in Q2 at 58.8%.

As the crypto market continues to evolve, DeFi users and projects continue to turn to more compliant, secure tokens. USDC stood out in Q2 due to its compliance, expanding its share while gradually eroding USDT's leading position, playing an increasingly important role in the stablecoin market. According to Footprint, USDT's market share shrank from 65.9% to 58.8% in Q1, while USDC's market share expanded from 17.5% to 23.7%.

At this rate, USDC is catch up to, or even surpass, USDT sometime between late 2021 to early 2022.

Market Share of Top 9 Stablecoins Data source: Footprint

3.The increase of the market cap of decentralized stablecoins market cap is nearly twice that of centralized stablecoins.

Centralized stablecoins continue to dominate the market cap, increasing by 290% from the beginning of the year, while decentralized stablecoins are up 400% from the beginning of the year, mainly attributed to DAI making gains of 350%.

Market Cap of Top 9 Centralized and Decentralized Stablecoins Data source: Footprint

4.Stablecoin trading volume reached a peak in May 2021

As more and more DeFi projects emerge, project owners have launched liquidity mining efforts using stablecoins, which has led to record-high use and transaction volume. According to Footprint, stablecoin transaction volume continued to rise in Q2 and reached a peak in May.

However, global regulatory turmoil caused the crypto market to suffer its biggest ever crash on May 19, taking down the transaction volume of stablecoins.

Transaction Volume of Stablecoins Data source: Footprint

5.DAI dominates the transaction volume of decentralized stablecoins

According to Footprint, both centralized and decentralized stablecoin transaction volumes have been hit by by the fall of cryptocurrency prices in May 2021. Due to the rapid development of the DeFi lending market, DAI has gradually become the hard currency of major digital assets to circulate on lending platforms and occupies half the volume of the top three lending platforms. Therefore, DAI's trading volume was able to maintain its level in April despite the drop in coin price, dominating the decentralized stablecoin market.

Transaction Volume of Decentralized and Centralized Stablecoins Data source: Footprint

Summary

The crypto market is developing, and stablecoins are playing a greater role. Different uses and applications for various tokens are also becoming clear

USDT, despite compliance issues like its reserve shortfall, is still the most widely used stablecoin, used as a medium of transaction in centralized exchanges.

USDC, on the other hand, has gained a solid foothold in the DeFi world with its compliance. With the spurt of DeFi projects, USDC may soon surpass USDT and become the most popular stablecoin.

Other stablecoins, like DAI, can also see significant growth if they find their unique application scenarios.