Stablecoin market share is shrinking while most cryptocurrencies surge

economictimes.indiatimes.com:

stablecoin market while most cryptocurrencies are posting outsized gains this year. Traders use stablecoins to move money into and out of cryptocurrency markets, swap funds between exchanges and as a haven in times of high volatility. Often the market capitalization of the tokens increases during rallies and declines during downturns. So far this year, the total value of the crypto market has jumped around 50% to about $1.2 trillion, while the stablecoin sector has shrunk almost 8% to around a two-year low of $127 billion, according to researcher CCData. This discrepancy could have several explanations. Hoping for higher returns, investors may be rotating out stablecoins and into appreciating market leaders Bitcoin and Ether, according to Jacob Joseph, a research analyst at CCData. Stablecoins don’t pay interest and usually seek to maintain a one-to-one ratio with other assets such as the dollar, hence their name. Crypto advocates downplay the decline, with some citing the overall light trading volume in the wake of last year’s market collapse.

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“I think the answer is that we’re not in a proper bull market, or if we are it’s only the very early innings of it,” said Sidney Powell, chief executive officer of lending marketplace Maple Finance. Moreover, several stablecoin issuers faced their own unique issues earlier this year, likely pushing some investors to rotate into other assets. Paxos is winding down