- Stablecoin volume shoots from $6 trillion in 2021 to $7.4T in 2022 while crypto markets bleed.
- Visa tops yearly volume with $12 trillion, while MasterCard and American Express fell below the global stablecoin volume.
- Cryptocurrencies search for bottom led by Bitcoin price ahead of possible year-end relief rally.
The crypto winter in 2022 has stifled growth across the board, sending giants like Three Arrows Capital and Celsius Network out of business. It has crashed market capitalization from nearly $3 trillion to $837 billion at the time of writing. Still, it did not hold back the stablecoin volume from hitting a new record high of $7.4 trillion – there were more transactions settled in stablecoins than on MasterCard.
Stablecoin transaction volume comes second only to Visa
A report by The Defiant revealed that the stablecoin volume surpassed traditional credit and debit card companies, including American Express with 1$ trillion and MasterCard with $2.2 trillion. Only Visa topped global settlement volume at $12 trillion in 2022.
According to CoinMetrics, the total trading volume of stablecoins set a new record this year, reaching 7.4 trillion U.S. dollars, surpassing the 6 trillion in 2021. The Mastercard is only 2.2 trillion. Only Visa has more transactions than stablecoins, settling $12 trillion.
— Wu Blockchain (@WuBlockchain) December 23, 2022
In just two years, transactions in the stablecoin sector are up 600%, considering only $1 trillion was settled in 2020. Data by CoinMetrics shows volume across all stablecoins rose to $7.4 trillion in 2022, up from $6 trillion in 2021.
The leading stablecoin, Tether (USDT), was the only token whose volume declined from $3.7 trillion in 2021 to $3.5 trillion this year. Its top competitor, USD Coin (USDC), doubled its volume in 2021, settling $2.9 trillion in transactions in 2022.
In terms of trade volume, all the stablecoins tracked by CoinMetrics recorded a 30% increase from $1 trillion last year. This increase is significant, keeping in mind volume from leading cryptocurrencies has plunged by over 90%. Currently, stablecoins take up approximately 18% of the total crypto market capitalization.
Spike in stablecoin volume positive for the market – Coinbase report
According to a recent crypto markets outlook report issued by Coinbase, the rise in stablecoin volume is a positive gesture. It shows investors are choosing to stay “digitally native during a market downturn.” Moreover, it emphasizes the power investors hold and could deploy as confidence in the market returns.
“Stablecoins are now one of the largest sectors in the crypto ecosystem with an outsized role in storing and transferring wealth,” Coinbase wrote in its report.
Is Bitcoin price primed for an year-end rally?
Bitcoin (BTC) price has upheld support at $16,000 since Friday last week, suggesting it could break out again. As the price moves above the dotted trend line on the daily timeframe chart below, the path with the least resistance could flip to the upside.
BTC/USD daily chart
The Moving Average Convergence Divergence (MACD) indicator is moving horizontally and close to the mean line (0.00) after failing to confirm last week’s buy signal. Bitcoin price requires a little push above $17,405 – in confluence with the 50-day Exponential Moving Average (EMA), to nurture a northbound move to $20,000, possibly before the New Year.
However, one popular crypto analyst and trader, Rekt Capital, recently told his followers on Twitter that Bitcoin is not done with the downtrend yet, and more lows could be on the way. He predicts a 20% drop to $13,900 unless Bitcoin price breaks and holds above resistance at $17,150.
New #BTC lows could be on the cards, especially if ~$17150 continues to act as resistance
— Rekt Capital (@rektcapital) December 19, 2022
Therefore a drop of up to -20% to ~$13900 wouldn't be out of the question
A -20% drop for $BTC would surely negatively impact Altcoins and make them drop more than -20%#Crypto #Bitcoin
Investors generally retreat for Christmas and New Year celebrations, but attention is set to remain on the bankrupt FTX exchange. Former CEO Sam Bankman-Fried arrived to the United States to answer to money laundering and fraud charges. The embattled crypto investor has been granted bail at $250 million and will stay with his parents as the case against him is heard in the courts.
Related artilces:
Binance continues asset de-listing spree as crypto winter bites hard, is relief coming in 2023?
Bitcoin prepares for spike in volatility after holding steady through US stock market bloodbath
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple wipes out weekly gains, experts comment on role of Ripple stablecoin
Ripple declined to $0.52 on Thursday, erasing all gains registered earlier this week. Ripple SVP Eric van Miltenburg’s comments on the firm’s stablecoin, and how it is expected to benefit the XRP Ledger and native token XRP have raised concerns among crypto experts.
Hedera HBAR slips nearly 10% after air is cleared on mistaken link with giant BlackRock
HBAR price is down nearly 10% on Thursday, partly erasing gains inspired by the misinterpreted link with BlackRock. Despite the recent correction, Hedera’s price is up 44% in the past seven days.
The reason behind Bonk’s 105% rise and if you should buy now Premium
Bonk price has shot up 105% in the past five weeks. A retracement into $0.0000216 or the $0.0000152 to $0.0000186 imbalance would be a good buying opportunity. Patient investors can expect double-digit gains from BONK that could extend up to 70%.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Bitcoin: BTC post-halving rally could be partially priced in Premium
Bitcoin (BTC) price briefly slipped below the $60,000 level for the last three days, attracting buyers in this area as the fourth BTC halving is due in a few hours. Is the halving priced in for Bitcoin? Or will the pioneer crypto note more gains in the coming days?