Contrary to forecasts by some specialists, the cryptocurrency market stabilized in July and no final capitulation took place. There are currently a significant amount of stablecoins whose holders are just waiting for the right time to re-enter the market.
Three of the top ten cryptocurrencies by market cap are stablecoins. According to CoinGecko, their combined market cap is currently $ 138 billion.
With a capitalization of $ 66 billion, Tether’s USDT is the third largest cryptocurrency. USDC by Circle ($ 54.4 billion) comes in fourth, while Binance’s BUSD ($ 17.8 billion) holds the seventh place in the standings.
On July 31, Binance CEO Changpeng Zhao has explained that this large sum of money remains on the sidelines waiting for the right time to return.
“If people really wanted to ditch cryptocurrencies, most of them wouldn’t have kept their stablecoins.”
The stablecoins remain on the sidelines
Investors who were serious about exiting the cryptocurrency market converted their assets into fiat currencies and withdrew from trading. This happened in mid-June, when over $ 400 billion left the market in a week.
Since then, the cryptocurrency market has gradually recovered to a market capitalization of $ 1.17 trillion, up 33% from the low of $ 875 billion recorded in the last cycle.
The amount of funds invested in the top three stablecoins equates to 12% of the total cryptocurrency market capitalization. A percentage that remains historically high despite the drop in the last month due to the decrease in Tether’s offer and the slight rebound of the market.
However, inflation is still one of the biggest problems in the market. With most countries suffering from rising prices, retail investors simply don’t have much money to invest in high-risk assets like cryptocurrencies. Unless there is a significant drop in inflation, the cryptocurrency market is unlikely to rise again.
This surge in inflation is also prompting investors in some countries to turn to stabecoins to protect themselves from depreciating their national currencies. Several Latin American countries are experiencing double-digit inflation, which is creating strong demand for stablecoins.
The market is back in red
After a weekend of consolidation, the cryptocurrency market saw a slight decline in its market cap during Monday morning’s Asian trading session. At the time of writing, the market has already lost 1.2% on the day, reaching a capitalization of $ 1.13 billion.
Bitcoin fell 1.7% over the day to trade at $ 23,323 while Ethereum fell 0.6% to $ 1,687, according to CoinGecko. Additionally, most altcoins are in the red today, with some of them posting double-digit percentage losses.
All information on our website is published in good faith and for general information purposes only. Any action taken by the reader based on the information found on our website is entirely at your own risk.