- Stablecoins aw a resurgence of interest following SEC’s lawsuits
- Rise in unique active addresses and weekly senders underlined growing interest in stablecoins
After months of waning interest in stablecoins, there appears to be renewed interest in the stablecoin sector. This, following the growing uncertainty fueled by the Securities and Exchange Commission’s (SEC) lawsuits.
Investors begin to seek stability
An indication of this growing interest can be evidenced by the hike in unique active addresses in stablecoin transactions.
According to CryptoQuant analyst onachained, for instance, these active addresses have been steadily increasing following the SEC’s litigations earlier this week.
Source: CryptoQuant
Consequently, there has been a significant spike in the number of weekly stablecoin senders. In fact, data from Dune Analytics revealed that the number of weekly senders on the network hit 489,384, at the time of writing.
Source: Dune Analytics
The analyst attributes this surge in interest in stablecoins to several factors. First of all, legal uncertainty is a key driver as the SEC’s lawsuits against prominent exchanges created a sense of ambiguity within the cryptocurrency market. This has led investors to perceive altcoins as riskier assets due to potential regulatory implications and associated legal risks.
Risk mitigation also played a significant role. According to onchain, during times of legal scrutiny, investors tend to adopt a risk-averse approach by shifting their investments from altcoins to stablecoins. This strategy allows them to reduce exposure to potential regulatory actions and safeguard their capital.
Preserving trading opportunities is another motivating factor for these traders. Investors who wish to maintain their market participation may convert their altcoins into stablecoins. This approach enables them to minimize exposure to potential regulatory hurdles while retaining a position in the cryptocurrency market, ensuring they are well-prepared for future trading opportunities.
USDT takes the lead
Currently, USDT is leading the market in terms of market cap. While USDC and DAI are trailing behind USDT, both stablecoins have recorded a hike in their market caps in recent weeks.
Source: Santiment
The surge in market cap can be attributed to the growing network growth of these stablecoins, indicating that new users are showing interest in the stablecoin market.
Source: Santiment
In terms of supply, USDT has hit an all-time high of $83.35 billion. Conversely, USDC has seen a decline in circulation.
Source: glassnode
Additionally, Tether has been utilizing the yield generated through USDT’s dominance to purchase BTC. This could potentially have a positive impact on Bitcoin as a whole in the future.