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Stablecoins have become a major player in the global financial scene. They’ve reached a total supply of $170 billion and a monthly transaction volume of $1.4 trillion. Tether leads the pack with $120 billion, followed by USDC at $35 billion. Analysts at Bernstein have rated Robinhood as an outperformer, expecting it to integrate stablecoins for crypto trading and cross-border transactions.
According to a recent report from Bernstein, stablecoins are now a significant part of the financial system. They’ve hit record levels in circulation and usage.
As of July 2024, the total supply of stablecoins reached an all-time high of $170 billion. Monthly settlement volumes have tripled in the past year, now standing at $1.4 trillion. This growth highlights the increasing importance of stablecoins in both the crypto ecosystem and traditional finance.
The analysts noted that stablecoins are now considered systemically important. They rank as the 18th largest holder of U.S. treasury securities, alongside major sovereign entities. They play a crucial role in providing access to USD savings for international users and serve as the primary base currency for crypto trading.
Tether (USDT) remains the dominant stablecoin, with $120 billion in circulation, while Circle’s USD Coin (USDC) follows with $35 billion. Tether’s leadership stems from its integration with global offshore exchanges and its use in cross-border payments outside the U.S.
Bernstein has rated Robinhood (HOOD) as an outperformer, setting a price target of $30. They expect the platform to continue integrating stablecoins for crypto trading and cross-border transactions. Recently, Robinhood acquired the international crypto exchange Bitstamp.
Interestingly, stablecoin adoption is increasingly separating from the overall volatility of the crypto market. The number of active wallets holding stablecoins has consistently risen to 22 million, even as trading volumes fluctuate. This suggests that people are using stablecoins for more than just trading.
The report also mentioned new players entering the stablecoin market, including PayPal’s PYUSD, which has nearly reached $1 billion in circulation since its launch.
Ethereum continues to dominate stablecoin transaction volume, accounting for about 45% of total transfers.
Notably, younger demographics, especially in emerging markets, are increasingly embracing stablecoins as a way to store value. The report found that 20% of individuals aged 18-24 in these markets hold 25-50% of their investment portfolios in stablecoins. This trend shows a growing preference for stablecoins over local currencies.