According to Santiment, the market intelligence platform with on-chain and social metrics, the combined market caps of the top six stablecoins have grown by $663.2 million since August 22. This is the first time this category of digital assets has experienced growth since the FTX collapse in November 2022. The stablecoins in this category include USDT, USDC, BUSD, DAI, TUSD, and USDP.
🧐 The market caps of the top 6 #stablecoins in #crypto have collectively declined by 25.9% in the past 18 months. Butfor the first time since the #FTX collapse last November, we see growth. Since Aug. 22nd, the combined market caps have grown by $663.2M. https://t.co/vA5uquc7OU pic.twitter.com/T0Y5UXGMDJ
— Santiment (@santimentfeed) September 3, 2023
In a recent post on X (Twitter), Santiment showed the significance of this recent growth. The digital assets analytics platform noted that the market caps of the top six stablecoins in crypto have collectively declined by 25.9% in the past 18 months. The decline results from the multiple challenges encountered by the crypto industry in 2022.
The first major challenge faced by the crypto industry involved the crash of Terra USD (UST) Stablecoin after losing its peg to the dollar. That event sent shockwaves across the crypto industry and triggered a domino effect. UST clashed alongside Terra LUNA, the native token of the Terra ecosystem.
The Terra crash caused a massive distrust in the crypto industry and shortly afterward, Celsius, a well-known crypto exchange and one of the biggest crypto lenders, packed up. The reason behind Celsius’ collapse was the lack of sufficient collateral to back its loan.
For similar reasons, another crypto lender, Three Arrows Capital (3AC), failed, dragging down Voyager, a crypto company it had borrowed from. All the listed events happened before the FTX collapse in November 2022, with all the affected organizations filing for bankruptcy. Following these events, the level of mistrust in the crypto industry increased significantly, impacting most cryptocurrencies, including stablecoins.
The prolonged decline of the stablecoins market cap indicates the extent of the failure of the crypto market for the past 18 months. However, the recent report by Santiment reflects a potential rejuvenation in the industry. A rising capitalization suggests a return of confidence among crypto investors, coinciding with efforts by FTX to resolve some of its challenges.