Stablecoin Market Cap Declines 35% in Bear Market, But Remains Vital for Crypto

Stablecoin market cap has declined 35% over the past 18 months, from a peak of $189B to $124B currently. Main reasons are lower retail participation and crypto yields vs traditional finance rates.

Market highly concentrated, with USDT, USDC, DAI, TUSD and BUSD comprising over 95%. USDT has been most resilient despite recent depegging fears.

USDC has seen the opposite fate as USDT, with its cap plummeting to multi-year lows. Regulatory hostility towards U.S.-based stablecoins is seen as the key reason.

Stablecoins are considered "crypto's killer app", comprising 70-80% of settlement activity despite only 10% market cap share. Use continues even amid bear market.

Trend expected to reverse with revived crypto interest, steady rate cuts, and a more pro-crypto regulatory environment.