According to DefiLlama data, the total market value of stablecoins broke a new record, surpassing the previous peak reached in March 2022. Excluding algorithmic stablecoins, this rise shows how important fixed-value digital assets have gained in the market.

Algorithmic stablecoins are assets that are not based on external assets, their value is maintained by algorithmic mechanisms, and therefore they may be more sensitive to volatility.

After peaking at $167 billion in March 2022, the stablecoin market declined rapidly and fell to $135 billion by the end of the year. However, this decrease has started to rise again as of 2023 and has recorded a continuous increase in the last 11 months. This growth is seen as a sign that new money is entering circulation in the crypto market.

Crypto analyst Patrick Scott, aka “Dynamo DeFi,” interpreted this as a sign that “new money is entering crypto.”

“Total stablecoin market capitalization, excluding algorithmic stablecoins, has reached its highest level ever, exceeding its previous peak in early 2022,” he said in a post on the X platform on August 26.

“The retail industry has been around in some form for at least eight months,” said Scott, who did not speculate on the reasons behind this increase, emphasizing the influence of individual investors on the market.

Tether (USDT), which continues its leadership in the stablecoin market, stood out with a market value of $ 91.69 billion in early 2024. Growing continuously throughout 2024, Tether showed a strong performance in August, exceeding $117 billion in market value for the first time. Tether has a large share of the stablecoin market, and this growth reflects the overall health of the market.

Circle’s USD Coin (USDC) has also had a gainful performance this year. Although USDC’s market cap has risen above $34 billion, its high for 2024, it is still far from reaching its all-time high of $55.8 billion in June 2022.

This shows that USDC has more growth potential to increase its market share against Tether.

But despite all this growth, stablecoin transaction volumes are in decline. According to a report published by CCData in July, stablecoin trading volume fell 8.35% to $795 billion due to lower trading activity on centralized exchanges.

The report states that concerns about the future of US Dollar Tether (USDT) in Europe and the Crypto Asset Markets Regulation contributed to the decline in stablecoin transaction activity. This decline continued in August and according to CoinMarketCap data, the market transaction volume remained at $46 billion.

The stablecoin market continues to hold an important place in the crypto ecosystem, especially with the growth of major players such as Tether and USD Coin. However, the decrease in transaction volumes and regulatory concerns show that a more cautious approach has been adopted in the market.