The total supply of stablecoins has been steadily declining almost every month since the UST crash in May 2020. Last month, the total supply of stablecoins recorded an average decrease of $1.7 billion, dropping below $125 billion. This figure represents an average decrease of about 33% from its all-time high.
Declining Total Supply of Stablecoins
The UST crash in May 2022 had a significant impact on the crypto ecosystem. Stablecoins, which are cryptocurrencies pegged to fiat currencies like the US Dollar or Euro, took a significant hit during the UST crash.
Many stablecoins, excluding USDT – the leading stablecoin in terms of market capitalization in the crypto ecosystem – suffered significant losses during this period. USDC and Binance USD (BUSD) experienced large-scale decreases in both their total supply and market value.
The total supply of stablecoins has been steadily declining almost every month since the UST crisis. Last month, the total supply recorded an average decrease of $1.7 billion, falling below the $125 billion level. This number represents an average decrease of about 33% from its all-time high.
USDT Market Share Continues to Rise
Despite the decline in the total supply of stablecoins and significant losses in many stablecoins, particularly USDC and BUSD, in recent months, USDT has continued to gain strength. During this period, USDT has witnessed notable increases in its market value and market share. According to DeFiLlama data at the time of writing, USDT’s market share in the stablecoin market stands at 66.7%.
However, despite the steady increase in USDT supply and market value, Tether – the company that issues USDT – has faced criticism from regulators on multiple occasions. Tether has been accused of not adequately backing its USDT with sufficient cash reserves, among other allegations.
