Stablecoin Market Struggles to Stabilize Despite USDT Massive Rally
Crypto analysis firm CCData has shared that the stablecoin market fell by 0.82% with an estimated value of $127 billion during July. The firm has reported that the overall stablecoin market cap remained in the decline for the 16th time in a row.
The total market cap reported for August was noted to be the lowest since August 2021. On the other hand, the market dominance of the stablecoin market also fell from 10.5% to 10.3% within July this year.
On the other hand, the trading volume for stablecoins increased by 16% noted at a total of $438 billion in June. The trading volume increase was the first positive tide in this aspect since March 2023.
Meanwhile, analysts believe that the recent rise in stablecoin trading may stem from the latest crackdown against cryptocurrency markets by the Securities and Exchange Commission. Another reason for the surge in stablecoin flows could be inspired by spot Bitcoin ETF filings from BlackRock and WisdomTree. On July 17th, a total of $219 billion are traded.
The price of Bitcoin and Ethereum last week remained at an impasse. The top cryptocurrencies were unable to break out of the key resistance levels at $32K and $2K.
However, there was a rise in the market dominance of USDT which also reached a new ATH with an accumulated market cap of $83.8 billion. After hitting a record ATH, USDT now accounts for 64% of the total crypto market cap.
Meanwhile, the market cap for other major stablecoins namely USDC and BUSD was recorded at $26.9 billion and $3.96 billion each. Both stablecoin alternatives declined at a pace of 3.01% and 4.57% one after another. These changes have marked a 7th consecutive month of devaluation for the Circle-backed stablecoin.
The current market level is also the lowest market cap for USDC since June 2021. Financial market analysts are still keeping an eye out for the next Fed interest hike announcement and the possibility of approval of Bitcoin spot ETF. On the other hand, the favorable market tides towards crypto from the Chinese government may turn stale sooner than expected.
Bitcoin Spot ETF Approval Will Pump Bitcoin Price Value
Blofin is a crypto analysis firm that has attempted to answer the question that everyone in the crypto community is eager to find out. The latest report issued by the firm has shed some light on the macroeconomic factors that are tied to the approval of a Bitcoin spot ETF.
The report suggests that the possible approval of Bitcoin spot ETF will make a direct and visible impact on Bitcoin prices in a positive direction.
The report has also talked about the market expectations in the event of interest rate hikes. The report has projected that FED is unlikely to slash interest rates for the next 6 months. Additionally, European Central Bank is expected to offer supplementary support to combat inflationary pressures. The report claims that in case inflows remain conservative Bitcoin market may remain within the $30k-$36K price range.
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