Stablecoin: The entire market is now worth more than Ethereum

By Daniele Corno

On the one hand, continuous growth, on the other, a slow decline: The Stablecoin market is worth more than Ethereum

The switch from Stablecoins to Ethereum

For years now, the stablecoin market has been a benchmark for liquidity in the cryptocurrency sector and as such, it directly affects prices.

With the growth of USDT by Tether and USDC by Circle, the entire market continues to reach new highs, with values growing strongly. In the last 12 months, the market cap of USDT has grown by +45%, from $100 to over $144 billion, and USDC, in the same period, has almost doubled from $33 to $60 billion.

Also important is the growth of all those decentralized, stablecoins, such as USDs from SKY and USDe from Ethena, but not only.

The growth of this sector has now reached an important milestone. With over $233 billion in market capitalization, the stablecoin market as a whole is now valued at more than the entire market supply of Ethereum. With an ETH price of less than $1,900, the entire market cap is valued at $225 billion.

We are close to a “Security” problem

Thanks to its consensus mechanism (Proof of Stake), the security of the Ethereum network is provided by validators staking ETH.

Currently, over 50% of the Stablecoin market is on Ethereum, along with a large part of the TVL in DeFi – mostly composed of ETH and Stablecoins. However, there are about 35 million ETH participating in staking out of a total of about 120 million ETH.

A value that is currently just under $70 billion, less than the supply of USDT on the network.

Could game theory be at risk? A significant development of liquidity on the network must be accompanied by a greater value, in terms of dollars, deposited in staking, to fully guarantee security and eliminate the economic incentive for possible attacks.

Are we facing a structural problem? What is certain is that today, among the biggest problems of Ethereum, the price plays a fundamental role.

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