Stablecoin Trading Volume on CEX Hits Seven-Month Low

According to a recent report by CCData, stablecoin trading volume on centralized crypto exchanges (CEX) hit its lowest point in seven months in June.

This decline marks the third consecutive month of reduced trading volumes.

Stablecoin Market Shows Mixed Signals: Rising Cap, Falling Volumes

CCData’s analysis points to a significant decrease in stablecoin trading volumes. In June, the figure plummeted by 18.0% to $97 billion. However, the total market capitalization of stablecoins rose for the ninth consecutive month during the reporting period.

The report reveals that the global stablecoin market capitalization increased by 0.53% month-on-month to $161 billion. The figure is the highest stablecoin market capitalization since April 2022, but the growth rate has slowed since May.

Read more: What is a Stablecoin and How do They Work?

Furthermore, CCData notes that the market share of stablecoins increased from 6.22% in May to 6.83% in June. This increase is attributed to investors cashing out of more volatile digital assets like Bitcoin and Ethereum, opting for the relative safety of stablecoins amid market uncertainties.

Tether USD (USDT), the leading stablecoin by market capitalization, maintained its dominance in June. USDT’s market capitalization increased by 0.97% compared to May. It held a substantial market share of 70.0% during the period.

Other stablecoins, like Ethena’s USDe, also drew attention with their significant monthly growth rates. USDE’s market capitalization has been rising for six consecutive months, increasing by 21.2% in June alone.

Despite an overall increase in the stablecoin market capitalization and market share, the slowdown in trading volumes reflects broader market uncertainties. This trend has been ongoing since April, coinciding with the Bitcoin halving, which historically impacts trading activities and the market’s overall behavior.

However, a June report from Coinbase offers a positive outlook for the stablecoin segment in the long term. The report highlights growing interest and utility for stablecoins, especially in cross-border transactions.

Read more: A Guide to the Best Stablecoins in 2024

For instance, PayPal’s support for cross-border stablecoin transfers across 160 countries with no transaction fees stands out as a significant development. Moreover, the annual settlement volume of stablecoins hit $10 trillion in 2023, more than ten times the amount of global remittances. This substantial volume showcases the growing acceptance and reliance on stablecoins for various financial transactions.

“Most top companies have interests in the potential benefits of stablecoins and other types of tokens, especially for faster, cheaper transactions. Seven in 10 Fortune 500 executives are interested in learning more about a stablecoin use case, mainly payments for instant processing time and lower fees,” the Coinbase report reads.