USDC ecosystem likely to find a boost soon, expert says, as stablecoin market cap rises $663 million
- Pro-crypto Faisal Khan has hinted at a possible announcement from Circle’s Jeremy Allaire, likely to boost the USDC ecosystem.
- Ripple attorney John Deaton has resounded the speculation, pointing to a possible “big” news to excite the market.
- It comes as Santiment data shows a soaring stablecoin ecosystem market cap, up $663 million since August 22.
Circle Chairman and CEO “Jeremy Allaire is going to publish something that you would love for the boost of the USDC ecosystem.” These are the words of pro-crypto personality Faisal Khan, who committed to sharing the details soon. The comments come a day after a report by Santiment, pointing to a market capitalization renaissance by the top six stablecoins.
USDC CEO to publish something important soon
The popular YouTuber, and licensing and payments consultant, has hinted at possible “big” news for the USDC ecosystem soon, anticipating an announcement from the network’s CEO Jeremy Allaire. The post has garnered the support of pro-Ripple attorney and CryptoLaw founder John E. Deaton, who asked his 291.7K followers to “pay attention,” as it would likely be “big.”
Pay attention folks. Could be big. https://t.co/NF9dDCHeUP
— John E Deaton (@JohnEDeaton1) September 4, 2023
The post on Crypto X has attracted the interest of crypto enthusiasts, who are already curious as the market yearns for an impulse to drive some action. While there is no confirmation on whether this is true, FXStreet team will keep you informed.
Meanwhile, Santiment data shows a significant move in the stablecoin sector as market capitalization for this digital asset category has steeply declined for around ten months now. However, since the last quarter of August, there has been a steady rise, which points to growing uncertainty in the market and investors looking for safer alternatives to hedge against.
Stablecoin market capitalization back on the rise
According to Santiment data, there has been a $663 million rise in the market capitalization of top stablecoins like Tether (USDT), USD Coin (USDC), Binance USD (BUSD), Maker’s (DAI) stablecoin, TrueUSD (TUSD), and USDP stablecoin. Previously, the data indicates a 25.9% drop in the total market capitalization of the six aforementioned stablecoins since March 2022. This decline was initiated by the epic collapse of Do Kwon’s Terra Luna ecosystem, which saw the Terra ClassicUSD (USTC) stablecoin depeg almost 100%.
According to @santimentfeed, the market cap of top stablecoins has seen a $663M rise since August 2023. This is the first notable uptick since FTX's collapse in November 2022. https://t.co/ooNG9x2XVa pic.twitter.com/8yCG5WNdUJ
— The Defiant (@DefiantNews) September 4, 2023
What a rise in market capitalization means for stablecoins
DeFiLlama data shows the total stablecoin market capitalization is $125.134 billion, signifying a 0.45% drop over the last 24 hours. It also shows that USDT is still at the helm of the stablecoin category, with $82.841 billion market capitalization marking a 66.20% dominance, followed by USDC with $25.856 billion.
DAI, TUSD, and BUSD follow with $5.223 billion, $3.4 billion, and $2.855 billion, respectively. USDP follows at position eight after Frax and USDD with a $487.82 million market capitalization.
DeFiLlama: Stablecoin market capitalization
A rise in market capitalization for stablecoins means that the total value of the stablecoins circulating in the market is rising. In this case, for the top six mentioned above. This surge points to the combined worth of USDT, USDC, DAI, TUSD, BUSD, and USDP, which has grown since August 22.
Considering the fact that stablecoins are usually pegged to stable assets like the US Dollar (USD), their market capitalization is an important reference point for the broader market sentiment on crypto assets.
An increase in market capitalization for stablecoins points to increased confidence in this category of digital assets compared to the more risk-prone alternatives like Bitcoin (BTC), Ethereum (ETH), and other altcoins.
As investors avoid the altcoins, more capital flows into stablecoins, thereby increasing stablecoin liquidity as well as heightening use cases such as payments and trading.
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
