There has been a notable shift in the largest stablecoin, tether (USDT). According to Copper’s data, the month-on-month growth in stablecoin supply in June was less than 1.5%, a significant decline from the over 5% growth seen in April and May.
Tether’s trading volume has also plummeted, dropping from a record high of over $767 billion on March 11 to around $53.5 billion on June 24. With a market capitalization of $113 billion, this slower growth in USDT supply suggests less money is entering the crypto markets.
This development is indicative of reduced liquidity in the crypto markets, which is currently resulting in lower crypto prices. With less liquidity, there is less new money flowing into the market, leading to reduced demand for cryptocurrencies. This bearish sentiment is also reflected in the prices of bitcoin (BTC) and ethereum (ETH), which are experiencing downward pressure. Altcoins are also unlikely to experience a significant rally in the short term.
Furthermore, traditional financial markets are starting to downgrade global growth expectations, with consistent disappointment in US economic data contributing to this trend.
However, there is positive news for USDT. The stablecoin has achieved a new milestone on the TRON network, recording a 24-hour trading volume of $53 billion, surpassing Visa’s average daily trading volume of $42 billion in the first quarter of 2024. This highlights the rapid growth and increasing use of USDT on the TRON network, which currently has over 45.5 million holders and over 1.8 billion transactions. The growing popularity of stablecoins like USDT is driven by their role as a stable alternative in economies with high inflation and declining local currencies, as seen in countries like Argentina and Venezuela.