Stablecoin trading activity increased significantly in November, with trading volumes surging to record levels as confidence in digital asset markets returned. Often seen as the backbone of cryptocurrency trading, stablecoins have become a mainstay for institutional and retail investors, driving market growth and signaling strong momentum heading into 2024.
Stablecoin trading volume hit $1.8 trillion.
According to a report released by CCData on November 27, stablecoin trading volume surged 77.5% this month, reaching $1.81 trillion as of November 25. According to these figures, November was the most active month for stablecoin trading on centralized exchanges this year.
This growth marks the continuation of a 14-month upward trend in the stablecoin market. Total stablecoin market capitalization increased 9.94% to $190 billion, surpassing the previous high of $188 billion recorded in April 2022 before TerraUSD collapsed. Nonetheless, as Bitcoin and altcoins gained traction among investors, stablecoins’ market dominance fell from 7.22% to 5.54% in October.
Market leaders are driving the surge
Tether (USDT) maintained its dominant position with a market capitalization of $133 billion, up 10.5%. This accounts for almost 70% of the total stablecoin market. Following this, Circle’s USD Coin (USDC) expanded its market capitalization by 12.1%, reaching $38.9 billion, the highest since February 2023.
Ethena Labs’ USDe stablecoin performed notably, with its market capitalization increasing 42.2% to $3.86 billion. Analysts believe this surge is due to increased interest in the Ethena ecosystem, especially following the proposal to enable a revenue sharing mechanism for Ethena (ENA) token holders.
Launched in early February of this year, USDe continues to attract investors with a competitive Annual Yield (APY), which currently stands at 21.2%. This is down from the March high of 55.9%, but still one of the highest returns among stablecoins.
Mixed performance between stablecoins
While several stablecoins have experienced growth, others have recorded declines. First Digital USD (FDUSD)’s market cap fell 14.9% to $1.9 billion, making it one of the biggest losers of the month. Likewise, the Sky Dollar (USDS), formerly known as Dai (DAI), fell 8.34% to $950 million.
This decline highlights the dynamic nature of the stablecoin market, where innovation and usability determine success. In contrast, the performance of market leaders such as Tether and USDC highlights their solid position as key liquidity providers in the cryptocurrency ecosystem.
Outlook for stablecoins
The resurgence of the stablecoin market in November reflects a broader trend of increased adoption and diversification in the cryptocurrency sector. As institutional investors continue to pour into the market, stablecoins remain a reliable gateway for capital inflows, facilitating trading, and hedging volatility.
As the market enters 2024, stablecoins are poised to play an even more significant role in shaping the digital asset landscape. Growing investor interest and evolving use cases could set the stage for further growth and innovation in the coming months.