The stablecoin market has seen some changes on the Ethereum ETH -0.59% and Tron blockchains. According to a study, by Six Degree, a known company that analyzes on chain data the supply of stablecoins on Ethereum has decreased significantly since its peak in March 2022 dropping by over 35%. This decline represents a decrease from $108 billion to the amount of $67.5 billion.
In contrast the situation is quite different on the Tron network, where there has been an increase of 57% in stablecoin supply from 2022 to now reaching $48.8 billion.
Several factors are responsible for the decline in Ethereums stablecoin supply. BUSD and USDC have been particularly impacted by this trend. However USDT (Tether) has managed to maintain its market capitalization and even experienced growth despite this trend.
Tether faced a decrease in mid 2022. Not only recovered afterward but also reached historical highs in terms of market capitalization among stablecoins. On Ethereum Tether managed to recover to its peak value in 2022 at $41 billion while experiencing growth on the Tron network up to $48.8 billion.
The reduction in stablecoin supply on Ethereum has also been accompanied by a decrease in their usage, within DeFi protocols.
In January 2022 DeFi platforms held 25% of stablecoins. However there has been a decrease since then, with DeFi holding around 5.5%. This shift can be attributed to the emergence of Ethereum Layer2 solutions, which have created a environment for the growth of DeFi and innovative protocols.
Furthermore the study uncovered insights about individuals who hold stablecoins on Ethereum. The majority (94.2%) of these holders possess than $1,000 worth of stablecoins contributing 9.28% to the overall holdings.
In contrast addresses with over 100,000 stablecoins make up a portion ( 0.562%) of total addresses but account for a substantial 87.6% of the total stablecoin holdings. Interestingly 60% of stablecoins in these addresses remain inactive or dormant residing either in reserve addresses with minimal expenditure or inactive addresses without any transactions, in the past 180 days.