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Stablecoin Trading Volume on Centralized Exchanges Hits Seven-Month Low in June

Stablecoin trading volume on centralized crypto exchanges (CEX) reached its lowest point in seven months in June, according to a recent report by CCData. This decline marks the third consecutive month of reduced trading volumes for stablecoins. However, the total market capitalization of stablecoins continued to rise during the reporting period.

The report highlights a significant decrease in stablecoin trading volumes, with a decline of 18.0% to $97 billion in June. Despite this, the global stablecoin market capitalization increased by 0.53% month-on-month to $161 billion. This growth in market capitalization is the highest since April 2022, although the rate of growth has slowed since May.

Investors opting for the relative safety of stablecoins amid market uncertainties are attributed to the increase in stablecoin market share from 6.22% in May to 6.83% in June. This trend is particularly noticeable as investors cash out of more volatile digital assets like Bitcoin and Ethereum.

The leading stablecoin, Tether USD (USDT), maintained its dominance with a market capitalization increase of 0.97% compared to May and a substantial market share of 70.0%. Other stablecoins, such as Ethena’s USDe, also experienced significant monthly growth rates.

Despite the overall increase in stablecoin market capitalization and market share, the slowdown in trading volumes reflects broader market uncertainties that have been ongoing since April. This trend coincides with the Bitcoin halving, which historically impacts trading activities and the market’s overall behavior.

However, a report from Coinbase in June offers a positive outlook for the stablecoin segment in the long term. The report highlights growing interest and utility for stablecoins, especially in cross-border transactions. The support for cross-border stablecoin transfers by companies like PayPal, with no transaction fees across 160 countries, is seen as a significant development. The annual settlement volume of stablecoins also surpassed $10 trillion in 2023, showcasing the growing acceptance and reliance on stablecoins for various financial transactions.

In conclusion, while stablecoin trading volume on centralized exchanges has hit a seven-month low in June, the overall market capitalization and utility of stablecoins continue to grow, indicating long-term potential for this segment.