USDT market capitalization hits a new high, but the decrease in active users has raised market follow

Recently, the market capitalization of USDT has continued to rise, once again breaking through the 83 billion USD mark, nearly reaching the historical high set in early May 2022. In general, an increase in the market capitalization of USDT, the largest stablecoin by market share, is often seen as a signal of a bull market. However, during this recent rise in USDT's market capitalization, the overall market has not seen a simultaneous surge, and mainstream cryptocurrencies like Bitcoin are still in a sideways consolidation phase.

So, where exactly does the new USDT flow? How much has entered the trading market? Through a comprehensive analysis of the changes in USDT's market capitalization, on-chain data, and trading data, we found that:

1. As of June 3, the total market capitalization of stablecoins is approximately 129.216 billion USD, a slight decrease of 0.87% over the past month and a decline of about 6.22% since the beginning of this year.

2. USDT currently has the largest market capitalization, approximately 83.212 billion USD, accounting for 64.40% of the total market capitalization, nearly 3 times that of USDC. Its market capitalization has increased by 1.41% in the past month and has risen by 25.63% since the beginning of this year, approaching its historical peak.

3. Since the beginning of this year, the market capitalization of TRC-20 USDT has increased by 34.90%, while the market capitalization of ERC-20 USDT has grown by 19.23%. The growth trend of TRC-20 USDT is more pronounced, with a larger increase and faster growth, currently accounting for 54.07% of the total market capitalization of USDT.

4. Although the market capitalization of USDT is close to the peak in early May 2022, its internal composition has changed, with TRC-20 USDT gradually becoming dominant. This structural change is crucial for understanding the market reactions caused by the changes in USDT's market capitalization, as there are certain differences in application scenarios between TRC-20 USDT and ERC-20 USDT.

5. Since the beginning of this year, the average daily on-chain transaction volume of TRC-20 USDT has shown a significant upward trend, with an increase of about 71.76% year-to-date; the average daily on-chain transaction volume of ERC-20 USDT has slightly decreased, with a drop of about 0.25%. The average daily on-chain transaction volume of both types of USDT is approximately 6.917 billion USDT.

6. Currently, the supply of ERC-20 USDT on exchanges is approximately 9.29 billion USDT, reaching a new high for the year. However, its daily trading volume has shown a significant shrinking trend. The average daily trading volume this month is only 0.0367 billion USDT, a decrease of 11.35% compared to May.

7. The amount of ERC-20 USDT currently locked in smart contracts accounts for approximately 15.03% of its circulating supply, which is equivalent to the level at the end of July 2022, and lower than the proportion (about 20%) when the market capitalization was similar in early May 2022. This suggests that under the same market capitalization scale, the current scale of USDT in DeFi may not be as large as before.

8. Currently, the number of independent active addresses on the ERC-20 USDT chain is approximately 56,800, which is lower than the average daily number of independent active addresses of 87,000 this year. Overall, there is a downward trend, indicating that the active user base of USDT may have decreased.

The total market capitalization of USDT has exceeded 83.2 billion USD, with the market cap of TRC-20 USDT significantly growing by about 35% this year.

As of June 3, the total market capitalization of stablecoins is approximately $129.216 billion. Among them, USDT has the largest market capitalization, about $83.212 billion, accounting for 64.40% of the total market capitalization. USDC has not seen significant improvement since the liquidity crisis in March, with a current market capitalization of approximately $28.770 billion, accounting for 22.26% of the total market capitalization, about 1/3 of USDT's market capitalization. Although the market capitalizations of BUSD, DAI, TUSD, USDP, and FRAX all exceed $1 billion, there is still a magnitude difference compared to USDT and USDC. USDT remains the absolute leader in the stablecoin market.

From the trend, the total market capitalization of stablecoins has slightly decreased by 0.87% compared to 130.363 billion USD a month ago, and has decreased by 6.22% compared to 137.792 billion USD at the beginning of this year, showing an overall downward trend. Most stablecoins, such as USDC, BUSD, DAI, etc., are consistent with the overall trend, with market capitalizations declining to varying degrees over the past month and since the beginning of the year.

Among the stablecoins with a larger market capitalization, only USDT, USDD, LUSD, and MAI have achieved counter-trend growth. Among them, USDT has the largest market capitalization and the most significant increase. Data shows that USDT's market capitalization has increased by 1.41% from $82.052 billion a month ago and has surged by 25.63% compared to $66.237 billion at the beginning of this year.

From the perspective of USDT's multi-chain composition, according to official data, the total authorized amount of TRC-20 USDT (based on Tron) and ERC-20 USDT (based on Ethereum) is currently the highest, approximately 46.12 billion USDT and 36.28 billion USDT respectively, far exceeding the total authorized amounts issued by other public chains. Considering the authorized but not issued amount, the actual issuance amounts of TRC-20 USDT and ERC-20 USDT are 44.962 billion USDT and 36.199 billion USDT respectively, accounting for a total of 97.61% of the total actual issuance of USDT.

TRC-20 USDT and ERC-20 USDT account for nearly all of USDT's market capitalization. Since the beginning of this year, the market capitalization of both has continued to rise, with TRC-20 USDT's market capitalization increasing from 31.717 billion USDT to 42.790 billion USDT, a growth of about 34.90%; ERC-20 USDT's market capitalization rising from 27.996 billion USDT to 33.380 billion USDT, a growth of about 19.23%. In fact, since October 2022, the market capitalization changes of these two types of USDT have begun to diverge, with TRC-20 USDT showing a more pronounced growth trend, larger increments, and faster growth rate.

Recently, although the market capitalization of USDT has returned to the high point near early May 2022, its internal structural pattern has changed, with TRC-20 USDT increasingly dominating. This structural change is crucial for understanding the market reactions caused by the fluctuations in USDT's market capitalization, as there are certain differences in application scenarios between TRC-20 USDT and ERC-20 USDT.

The daily on-chain transaction volume exceeds 6.9 billion USDT, the exchange inventory has increased, but the transaction volume has declined.

Where is the recently issued USDT flowing to? From the underlying usage situation, since the beginning of this year, the daily on-chain trading volume of TRC-20 USDT has shown a significant upward trend, increasing from 414,200 USDT at the beginning of the year to the current 711,400 USDT, with an increase of about 71.76%. The average daily trading volume is approximately 9.37 billion USDT.

Since the beginning of this year, the daily on-chain trading volume of ERC-20 USDT has shown a slight downward trend, decreasing from 1.537 billion USDT at the beginning of the year to the current 1.541 billion USDT, a decline of about 0.25%, with an average daily trading volume of approximately 4.464 billion USDT. Overall, the average daily on-chain trading volume of these two types of USDT is approximately 6.917 billion USDT.

From a market segmentation perspective, the increased on-chain transaction volume may occur in centralized exchanges, DeFi protocols, or other payment scenarios.

Data shows that since the beginning of this year, the supply of ERC-20 USDT on exchanges has shown a significant upward trend, currently around 9.29 billion USDT, the highest of the year, up 34.62% from the lowest point of 6.90 billion USDT earlier this year.

However, interestingly, while the supply of ERC-20 USDT on the exchange has increased, the daily trading volume has shown a significant decline. This year, the average daily trading volume of ERC-20 USDT was 0.0742 billion USDT, and after April, the average daily trading volume each month has been below the annual average. This month, the average daily trading volume of ERC-20 USDT was only 0.0367 billion USDT, a month-on-month decrease of 11.35% compared to May, and May's month-on-month decline was also 22.47%. Affected by the liquidity crisis of stablecoins in March, the month-on-month decline in April was as high as 51.05%.

It can be seen that although the USDT in the exchange has increased, it has not promoted centralized market trading, which may also be one of the reasons why the market capitalization growth of USDT has not been reflected in the coin price.

From the perspective of the USDT locked in DeFi protocols, the inflow situation is also unclear. Overall, the current number of ERC-20 USDT locked in smart contracts accounts for about 15.03% of its circulating supply, which is equivalent to the level at the end of July 2022, and lower than the proportion when the market capitalization was similar in early May 2022 (around 20% at that time). This indicates that under the same market capitalization, the current scale of USDT in DeFi may not be as large as before.

From the recent changes in the locked amount of USDT in specific protocols, on Ethereum, the locked amount of USDT in some leading protocols has increased over the past month, with the most significant growth being in a certain DEX, which grew by 31.13%. Compared to the beginning of this year, this represents a growth of 15.82%, but compared to last year, the locked amount of USDT still shows a significant decline. On Tron, the most notable growth is seen in a certain protocol, where the locked amount of USDT increased by 46.30% over the past month, with an annual increase of 60.51%. The differences in the changes of the locked amount of USDT across different protocols are significant.

Based on a comprehensive analysis of multidimensional data, the recently issued USDT has partially flowed into centralized exchanges, but it has not promoted actual trading, and trading volume has continued to shrink. A small portion has also flowed into DeFi protocols, but it is mainly concentrated in a few leading protocols, and the overall scale is still lower than when the market capitalization was the same previously. Another possibility is that the newly issued TRC-20 USDT has flowed into other payment scenarios.

Bitcoin price is steadily rising with reduced volatility, and the decrease in the number of independent active addresses on the USDT chain is even more noticeable.

The current overall market environment may also be a reason why the market capitalization of USDT has not been reflected in the changes in coin prices. On one hand, many mainstream assets represented by Bitcoin are currently in a consolidation phase. Market data shows that since the beginning of this year, although the price of Bitcoin has been on an upward trend, this trend is approaching a "step" shape, with a long platform construction period and reduced daily price fluctuations. In this situation, funds may choose to continue waiting and observing. This is reflected in the data as an increase in exchange reserves but a decrease in trading volume.

On the other hand, during the market consolidation phase, user activity has also decreased. The number of independent active addresses on the blockchain has always been a good indicator for observing the user scale. From the trend of the number of independent active addresses on the Bitcoin blockchain this year, it has generally remained basically stable, with a noticeable rebound after May, but it did not create a new high for the year. Overall, there has been no significant growth in the scale of active users for Bitcoin.

In contrast, the number of independent active addresses on the ERC-20 USDT chain has shown a significant downward trend this year, currently around 56,800, a marked decrease from the highest single-day independent active address count of 149,900 earlier this year, and also significantly lower than the average daily independent active address count of 87,000. This suggests that the active user base of USDT may have diminished.