Stablecoins touched a huge milestone this week, passing $20 billion in market cap, according to data from Cryptoslate, and now the top five stablecoins can claim the $20 billion valuation all by themselves. Stablecoins are known for their strong price stability and they are gaining traction in the ever-changing crypto market, with a sectorial dominance in the crypto universe at 6.10%.
Tether (USDT) is ranked as the third-most popular cryptocurrency overall, and the most valuable stablecoin with a market value of $15.38 billion. USD Coin (USDC) comes in a distant second at $2.54 billion, DAI (DIA) is valued at $933.84 million, Binance (BUSD) is valued at $519.71 million, and True USD (TUSD) is valued at $508.58 million, to round out the top five stablecoins.
Stablecoins are usually pegged to fiat currencies such as U.S. Dollar, Euro, Japanese Yen, British pounds sterling. So, why are Stablecoins now on the rise? With growing economic uncertainty in many geopolitical zones, stablecoins are now used by both small and large entities in bypassing capital controls, high cost of transfers, and other enforcements associated with fiat currencies without experiencing inflation or hyperinflation in some case.
Many leading crypto exchanges don’t offer fiat pairs, so making stablecoins the only viable options for investors and crypto traders helps them transfer their volatile crypto assets like BTC, ETH, LINK or XRP into stablecoins and other alternative tokens like Pax Gold (PAX) during periods of high price swings and let the risk get absorbed by larger institutional traders and exchanges.