USDT market capitalization surpasses 83 billion USD, but the market reaction is subdued.

Recently, the market capitalization of USDT has continued to rise, once again breaking through the 83 billion USD mark, almost reaching the historical high set in early May 2022. Typically, as the largest stablecoin by market share, the rise in USDT's market capitalization is seen as a precursor to a bull market. However, during this increase in USDT's market capitalization, the market conditions have not experienced a simultaneous rise, with mainstream crypto assets such as Bitcoin still in a period of sideways adjustment.

So, where exactly has the newly added USDT gone? How much has entered the trading market? By conducting 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 decrease of about 0.87% in the past month and a decrease of about 6.22% since the beginning of the year.

2. The current market capitalization of USDT is approximately $83.212 billion, accounting for 64.40% of the total market capitalization of stablecoins, nearly three times that of USDC. Its market capitalization has increased by 1.41% in the past month and by 25.63% since the beginning of the 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 increased by 19.23%. The growth momentum of TRC-20 USDT is more evident, with a larger increment and a faster growth rate, currently accounting for 54.07% of the 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 dominating. This change is significant for understanding the market response caused by the fluctuations in USDT's market capitalization, as the application scenarios of TRC-20 USDT and ERC-20 USDT differ.

5. Since the beginning of this year, the daily on-chain transaction volume of TRC-20 USDT has shown a significant upward trend, with an increase of approximately 71.76% for the year, while the 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 the two types of USDT is approximately 6.917 billion USDT.

6. Currently, the supply of ERC-20 USDT on exchanges is about 9.29 billion USDT, the highest this year. However, its daily trading volume is showing a significant shrinking trend. This month's average daily trading volume 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 comparable to the level at the end of July 2022, and lower than the proportion (around 20%) when the market capitalization was similar in early May 2022. This suggests that, at an equivalent market capitalization, the 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 independent active addresses of 87,000 this year. Overall, it shows a downward trend, indicating that the active user base of USDT may have decreased.

The total market capitalization of USDT breaks 83.2 billion USD, the market capitalization of TRC-20 USDT has increased significantly by about 35% this year.

As of June 3, the total market capitalization of stablecoins is approximately 129.216 billion USD. Among them, USDT has the largest market capitalization, approximately 83.212 billion USD, accounting for 64.40% of the total market capitalization. USDC has not seen significant improvement after the liquidity crisis in March, with a current market capitalization of about 28.770 billion USD, accounting for 22.26% of the total market capitalization, which is about 1/3 of USDT's market capitalization. Although the market capitalizations of BUSD, DAI, TUSD, USDP, and FRAX all exceed 1 billion USD, 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% from 130.363 billion USD a month ago, and has decreased by 6.22% from 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 larger market capitalization, USDT, USDD, LUSD, and MAI have continued to rise against the trend. Among them, USDT has the largest market capitalization and the most significant increase. Statistics show that USDT's market capitalization has risen by 1.41% from $82.052 billion a month ago, and has increased by 25.63% from $66.237 billion at the beginning of this year.

From the perspective of the multi-chain composition of USDT, currently, the total authorized amount of TRC-20 USDT (based on Tron) and ERC-20 USDT (based on Ethereum) is the highest, approximately 46.12 billion USDT and 36.28 billion USDT respectively, far exceeding the total authorized amount issued on other public chains. Considering the authorized but not issued amount, the actual issued 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 issued amount of USDT.

TRC-20 USDT and ERC-20 USDT account for almost the entire market capitalization of USDT. Since the beginning of this year, the market capitalization of these two types of USDT has been continuously rising, with TRC-20 USDT's market capitalization increasing from 31.717 billion USDT to 42.790 billion USDT, a growth of approximately 34.90%, and ERC-20 USDT's market capitalization rising from 27.996 billion USDT to 33.380 billion USDT, a growth of approximately 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 significant growth trend, larger increments, and faster growth rate.

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

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

Where is the recently issued USDT flowing to? Looking at the underlying usage, since the beginning of this year, the daily on-chain transaction 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, a growth rate of about 71.76%, with an average daily transaction volume of approximately 9.37 billion USDT.

Since the beginning of this year, the daily on-chain transaction 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%. The average daily transaction volume is approximately 4.464 billion USDT. Overall, the average daily on-chain transaction volume of these two types of USDT is about 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 at approximately 9.29 billion USDT, the highest this year, up 34.62% from the lowest point of 6.90 billion USDT earlier in the year.

However, interestingly, while the stock of ERC-20 USDT in exchanges is increasing, the daily trading volume is showing a significant shrinking trend. This year, the average daily trading volume of ERC-20 USDT is 0.742 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 is only 0.367 billion USDT, a month-on-month decrease of 11.35% compared to May, while May also experienced a month-on-month decrease of 22.47%. Affected by the liquidity crisis of stablecoins in March, the month-on-month decrease in April was as high as 51.05%.

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

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

From the recent changes in the locked amount of USDT in specific agreements, on Ethereum, the locked amount of USDT in Uniswap V3, Compound, and AAVE V2 has increased in the past month, with Uniswap V3 showing the most significant growth of 31.13%, which is an increase of 15.82% compared to the beginning of this year, but compared to last year, the locked amount of USDT still shows a noticeable decline. On Tron, the most significant growth is seen in JustMoney, where the locked amount of USDT increased by 46.30% in the past month, with a total increase of 60.51% this year. The changes in the locked amount of USDT across different agreements vary significantly.

From a comprehensive multidimensional data perspective, the recently issued USDT has partially flowed into centralized exchanges, but it has not promoted actual trading, and the trading volume has continued to shrink; a small portion has 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 issued TRC-20 USDT has flowed into other payment scenarios.

The price of BTC is steadily rising, with reduced volatility, and the decrease in the number of independently active addresses on the USDT chain is even more pronounced.

The current overall market environment may also be a reason why the increase in USDT market capitalization has not been reflected in the price changes of cryptocurrencies. On one hand, many mainstream assets, represented by BTC, are currently in a sideways adjustment phase. Market data shows that although the price of BTC has shown an upward trend since the beginning of this year, this trend is approaching a "step" shape, with a long platform construction period and a decrease in daily price fluctuations. In this situation, funds may choose to continue to wait and see, which is reflected in the data as an increase in exchange stock but a decrease in trading volume.

On the other hand, during the market consolidation phase, user activity has also declined. The number of on-chain independent active addresses has always been a good window for observing user scale. From the trend of the number of independent active addresses on the BTC chain this year, it has generally remained stable, with a noticeable rebound after May, but it did not reach a new high for the year. Overall, there has been no significant growth in the active user base of BTC.

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 notable decrease from the highest single-day independent active address count of 149,900 earlier this year, and also far below this year's average daily independent active address count of 87,000. This suggests that the active user base of USDT may have decreased.