Digital assets firm Gemini has shared an analyst note which pointed out that a lot of the recent stablecoin onchain activity has, for the most part, remained fairly resilient despite the headwinds across global financial markets.
As stated in the latest research report from Gemini, stablecoin onchain activity across the crypto and blockhain ecosystem has remained resilient even though there have been considerable headwinds as of late.
Gemini’s latest crypto and blockchain market analysis produced with research firm Praxis Veritas, takes a deeper look at how stablecoins have “continued their recent success while the broader carpet market has wavered.”
Since the beginning of 2024, aggregate crypto market capitalization has “traded sideways in a period of consolidation, with bitcoin down some 15% from all-time highs.”
The update from Gemini also mentioned that the market capitalization of stablecoins had gradually retraced “to less than $2 trillion by the start of September after surging to more than $2.7 trillion in the first quarter.”
According to the crypto market update from Gemini, the resilience of the stablecoin market is due to a few factors:
- Despite a six-month period of volatile price action in major crypto assets, stablecoin activity continues growing: According to CoinMetrics, aggregate stablecoin supply surpassed $161 billion by the end of August, approaching the previous high of 2022.
- Falling yields in the US in recent months and trading-related use cases have contributed to robust stablecoin data: Stablecoins become more appealing when yields are low. With two-year yields close to 3.5%, the macro backdrop for stablecoin adoption is as positive as we have seen it in the past two years.
- New use cases for stablecoins are emerging for L1 and L2 scaling solutions and value transfers in unstable currency regimes: New scaling technologies and integration into payments and transaction channels are leading to record penetration of stablecoin use in real-world financial interactions.