Analyst Note: Stablecoin Onchain Activity Remains Resilient Despite Headwinds

Gemini’s latest analyst produced with research firm Praxis Veritas, takes a closer look at how stablecoins have continued their recent success while the broader carpet market has wavered.

Since the beginning of 2024, aggregate crypto market capitalization has traded sideways in a period of consolidation, with bitcoin down some 15% from all-time highs. But the market capitalization of stablecoins had gradually retraced to less than $2 trillion by the start of September after surging to more than $2.7 trillion in the first quarter.

The resilience of the stablecoin market is due to a few factors:

• Despite a six-month period of volatile price action in major crypto assets, stablecoin activity continues growing: According to CoinMetrics, aggregate stablecoin supply surpassed $161 billion by the end of August, approaching the previous high of 2022.
• Falling yields in the US in recent months and trading-related use cases have contributed to robust stablecoin data: Stablecoins become more appealing when yields are low. With two-year yields close to 3.5%, the macro backdrop for stablecoin adoption is as positive as we have seen it in the past two years.
• New use cases for stablecoins are emerging for L1 and L2 scaling solutions and value transfers in unstable currency regimes: New scaling technologies and integration into payments and transaction channels are leading to record penetration of stablecoin use in real-world financial interactions.

Onward and Upward,
Team Gemini

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