Research by Sixdegree, a data-driven consultancy and analytics firm, reveals that the stablecoin market did not see a significant increase in value during the recent bull market. The market value of stablecoins is currently just below the $139 billion recorded in December 2022, standing at $129.5 billion. The study also highlights a shift in the stablecoin landscape, with Ethereum (ETH) losing ground while Tron (TRX) is on the rise.
The current trend in the stablecoin market is linked to contrasting developments within the two major blockchain networks, Ethereum and Tron. Ethereum’s stablecoins have seen a notable decrease in market value, dropping by 34% since 2022 to $69.4 billion. In contrast, Tron’s stablecoin market value surged by 57.7% during the same period. Sixdegree’s in-depth analysis of Ethereum’s stablecoin dynamics reveals interesting patterns in the distribution of these assets.
In Ethereum, half of the stablecoins are held in personal wallet addresses, 30% in centralized exchanges (CEXs), and only 5.5% in decentralized finance (DeFi) protocols. This represents a significant shift from January 2022, when DeFi protocols held approximately 25% of Ethereum’s stablecoins. Different trends are observed among leading stablecoins on Ethereum, such as USDT, USDC, and DAI. While USDT’s market value remained relatively stable with a 23% increase, USDC and DAI experienced decreases of 47% and 30%, respectively.
Tron’s market dynamics tell a different story. About 30% of Tron’s stablecoins are held in CEXs, a mere 0.2% in DeFi protocols, and the majority, around 70%, in personal wallet addresses. This distribution indicates a trend towards holding more stablecoins in personal wallets on Tron, unlike Ethereum.
The year 2023 has seen growth in the stablecoin market on the Tron network. Sixdegree attributes this growth to various factors, including the expanding user base, with about 40% of the weekly 5 million stablecoin users preferring Tron in the first half of 2023. This preference has led to significant transaction volumes reaching 70 billion dollars weekly.
The growth is particularly notable in emerging markets, such as Latin American countries, where low transaction fees and high transaction speeds on Tron are attractive, especially in countries with high inflation like Argentina.