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According to research by data-driven consulting and analytics firm Sixdegree, there was no significant increase in the market value of stablecoins during the last bull market. The research findings indicate that the market value of the stablecoin market is currently just below the $139 billion recorded in December 2022, at $129.5 billion. Moreover, the research shows that while Ethereum (ETH) is losing ground in the stablecoin sector, Tron (TRX) is growing.
Ethereum Loses Ground in Stablecoins, Tron Gains Traction
The current trend in the stablecoin market is associated with contrasting developments in the two major blockchain networks of Ethereum and Tron. The market value of stablecoins on Ethereum has seen a significant decrease, falling by 34% to $69.4 billion since 2022. In contrast, the market value of stablecoins on Tron has increased by 57.7% during the same period. Sixdegree, which conducted an in-depth analysis of Ethereum’s stablecoin dynamics, reveals some interesting patterns in the distribution of these assets.
Half of the stablecoins on Ethereum are held in personal wallet addresses, 30% in centralized exchanges (CEXs), and only 5.5% in decentralized finance (DeFi) protocols. This represents a significant change from the peak in January 2022, when DeFi protocols held about 25% of Ethereum’s stablecoins.
Different trends are also seen in leading stablecoins such as USDT, USDC, and DAI on Ethereum. While the market value of USDT remained relatively stable with a 23% increase, USDC and DAI saw decreases of 47% and 30%, respectively.
In contrast, the market dynamics of Tron tell a different story. Approximately 30% of Tron’s stablecoins are held in CEXs, 0.2% in DeFi protocols, and the majority, about 70%, in personal wallet addresses. This distribution indicates a different trend in Tron, with more stablecoins being held in personal wallet addresses compared to Ethereum.
Tron’s Stablecoin Market Grows Throughout 2023
2023 has been a year of growth for the stablecoin market on the Tron network. Sixdegree attributes this growth to various factors. One key factor is the expanding user base, with about 40% of the weekly 5 million stablecoin users preferring to use Tron in the first half of 2023. This preference led to significant transaction volumes reaching 70 billion dollars each week.
This growth is particularly notable in emerging markets such as Latin American countries, where low transaction fees and high transaction speeds on Tron are seen as attractive, especially in countries with high inflation like Argentina.
