The dominance of stablecoins across the cryptocurrency landscape appears to be at its lowest since December 2021, despite a record monthly supply.
Data from CoinMarketCap shows that stablecoin dominance, which tracks the market share of coins such as USDC, USDT and PAX, reached a new low of 31.13% on Wednesday. This is significantly lower than the 36.17% high reached last December.
The decline in stablecoin dominance appears to be driven by the launch of several new digital assets, as well as increased activity on the Ethereum and other decentralized finance (DeFi) protocols.
Data from Chainanalysis shows that the total amount of Ethereum locked into DeFi protocols and on Ethereum-based exchanges has surged by nearly 40% since the start of 2021. Furthermore, a slew of new digital assets such as the upcoming NFT-focused Shiba Inu (SHIB) token, as well as BNB, DOT and LINK, have also captured investor attention.
Meanwhile, the monthly supply of stablecoins, which has more than doubled since the start of 2021, appears to be struggling to catch up to the growing demand. Even though the combined supply of USDC, USDT, PAX and other major stablecoins reached new highs in March of over $72 billion worth of coins, these figures are still dwarfed by the total market cap of cryptoassets, which currently stands at over $1.6 trillion.
Additionally, the data also shows that the majority of the new stablecoin supply is concentrated in just a few coins. USDC and USDT, for example, account for over 91% of the monthly supply figures, with PAX and other coins making up the remaining 8.5%. For comparison, Ethereum and Bitcoin combined make up over 70% of the total market cap.
It remains to be seen whether the shift away from certain stablecoins as seen in the data will continue into April.