Ten Things You Need to Know About the Development of Stablecoins! How much did the market cap drop during the bear market? Which two chains account for the highest trading volume?

The head of cryptocurrency fund at asset management firm Brevan Howard, Peter Johnson, recently released a stablecoin report analyzing the development and adoption of stablecoins over the past few years. Here are the top ten key points outlined by Peter Johnson in the report!

Top 10 Points from the Stablecoin Report

1. In 2022, the on-chain settlement of stablecoins exceeded $11 trillion, far surpassing PayPal's transaction volume of $1.4 trillion and approaching Visa's payment transaction volume of $11.6 trillion. It also accounted for 14% of ACH settlement transactions, surpassing Fedwire settlement transactions by 1%.

   

2. Over 25 million blockchain addresses hold stablecoins worth more than $1, with approximately 80% of addresses holding between $1-100. To put this vast number into perspective, if a U.S. bank had 25 million accounts, it would be the fifth-largest bank in the U.S. in terms of account numbers.

   

3. Approximately 5 million blockchain addresses transfer stablecoins weekly, representing a significant number of global users who regularly interact with stablecoins. However, this is only a rough estimate as it does not account for centralized exchange users or users holding multiple addresses.

   

4. Both centralized and decentralized exchange transactions from December of last year to April of this year have declined by over 60%, while on-chain stablecoin transaction volume decreased by only 11%. The number of active stablecoin addresses per week and stablecoin transactions per week have both grown by over 25%.

   The data indicates a gradual separation of stablecoin usage from exchanges, with stablecoin transaction volume potentially being driven by non-trading and speculative activities.

   

5. Among approximately 5 million active stablecoin addresses per week, about 75% of addresses have weekly transaction volumes below $1,000, indicating that small and retail users may constitute the majority of stablecoin users. The number of addresses transacting $1,000 - $10,000 per week has gradually decreased since 2018, currently accounting for only 19%.

   

6. The supply of stablecoins has grown from less than $30 billion five years ago to over $1.25 trillion today, peaking at over $1.6 trillion. Compared to a 24% decrease in stablecoin market capitalization from its peak, the overall cryptocurrency market capitalization has dropped by about 57%. This phenomenon illustrates the resilience of stablecoin market capitalization, especially when government bonds and money market instruments can yield a 5% interest rate.

   

7. Less than a third of stablecoins are held on exchanges, with the majority held in Externally Owned Accounts (EOA).

   

8. Stablecoin activity is predominantly driven by USDT, which not only accounts for 69% of stablecoin supply but also represents 80% of active addresses, 75% of transaction counts, and 55% of transaction volume since the beginning of this year.

   

9. Most stablecoin activity occurs on the Tron and BNB chains, with Tron and BNB chains collectively representing 77% of active addresses per week, 75% of transaction counts, and 41% of transaction volume.

   

10. On average, Ethereum primarily facilitates higher-value transactions. Despite accounting for only 6% of active wallets and 3% of transaction counts, the Ethereum blockchain holds 55% of stablecoin supply and processes nearly 50% of weekly stablecoin transaction volume.

    

These are the key points from the report. Despite the continuous growth in stablecoin usage data, one of the report's authors, Peter Johnson, believes that we are still in the early stages. He predicts that the circulating supply of stablecoins will grow to trillions of dollars in the coming years, with annual transaction values reaching hundreds of billions of dollars.

Additionally, it is expected that stablecoins will increasingly provide financial services to people globally who are underserved by banks or unable to access full services, offering an escape route for those facing high inflation in national currencies.