USDT market capitalization breaks 83 billion USD, but the market is still in a Sideways trend.

Recently, the market capitalization of USDT has continued to rise, once again breaking through the $83 billion mark, and it is very close to the historical peak set in early May 2022. Normally, as the largest stablecoin by market share, the rise in USDT's market capitalization is often seen as a precursor to a bull market. However, this time, the increase in USDT's market capitalization has not led to a simultaneous rise in the overall market, and mainstream crypto assets like Bitcoin are still in a sideways adjustment phase.

So, where exactly has the newly issued USDT gone? 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 have identified the following key points:

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

2. USDT currently has the largest market capitalization, approximately 83.212 billion USD, accounting for 64.40% of the total market capitalization of stablecoins, almost three times that of USDC. USDT's market capitalization has increased by 1.41% in the past month and has surged by 25.63% since the beginning of the year, nearing 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 significant, with a larger increment and faster growth rate, 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 clearly dominating. This change is crucial for understanding the market response triggered by the fluctuations in USDT's market capitalization, as there are differences in the application scenarios of TRC-20 USDT and ERC-20 USDT.

5. Since the beginning of this year, the daily average on-chain trading volume of TRC-20 USDT has shown a significant upward trend, with an increase of about 71.76% for the year. In contrast, the daily average on-chain trading volume of ERC-20 USDT has slightly decreased, with a decline of about 0.25%. The combined daily average on-chain trading 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 shows a significant shrinking trend. The average daily trading volume this month is only 0.0367 billion USDT, a month-on-month 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 when the market capitalization was similar at the beginning of May 2022 (around 20% at that time). This suggests that under the same scale of market capitalization, the current scale of USDT in DeFi may be lower than 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 address count of 87,000 this year, showing an overall downward trend, indicating that the active user base of USDT may have decreased.

The total market capitalization of USDT has surpassed 83.2 billion USD, with the market capitalization of TRC-20 USDT experiencing a significant growth of 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 at about $83.212 billion, 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 approximately $28.770 billion, accounting for 22.26% of the total market capitalization, about 1/3 of USDT's market capitalization. Although stablecoins such as BUSD, DAI, TUSD, USDP, and FRAX have market capitalizations exceeding $1 billion, there is still a significant difference in magnitude 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 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 larger market capitalization, only USDT, USDD, LUSD, and MAI have seen their market capitalizations increase against the trend. Among them, USDT has the largest market cap and the most significant increase. Data shows that USDT's market capitalization has risen by 1.41% from $82.052 billion a month ago, and has significantly increased by 25.63% from $66.237 billion at the beginning of this year.

From the perspective of USDT's multi-chain composition, according to the data, the total authorized amounts of TRC-20 USDT (based on Tron) and ERC-20 USDT (based on Ethereum) are currently the highest, at approximately 46.12 billion USDT and 36.28 billion USDT, far exceeding the total authorized amounts issued by other public chains. Considering the authorized but unissued amounts, 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 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 increasing, with TRC-20 USDT's market capitalization rising from 31.717 billion USDT to 42.790 billion USDT, an increase of about 34.90%, and ERC-20 USDT's market capitalization rising from 27.996 billion USDT to 33.380 billion USDT, an increase 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 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 this hides a change in the internal composition of USDT, with TRC-20 USDT increasingly dominating. This change in composition will play an important role in understanding the market reactions caused by the fluctuations in USDT's market capitalization, as there are certain differences in the application scenarios of TRC-20 USDT and ERC-20 USDT.

The daily on-chain trading volume exceeds 6.9 billion USDT, exchange inventory increases, but trading volume declines.

Where has the recently issued USDT gone? From the perspective of 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, an increase of approximately 71.76%, with an average daily transaction volume of about 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, with a decline of approximately 0.25%. The average daily transaction volume is about 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, an increase of 34.62% from the year's lowest point of 6.90 billion USDT.

However, interestingly, while the supply of ERC-20 USDT in the exchange is increasing, the daily trading volume shows a significant shrinking trend. This year, the average daily trading volume of ERC-20 USDT is 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 is only 0.0367 billion USDT, a month-on-month decrease of 11.35% compared to May, while May also saw a month-on-month decline of 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 amount of USDT in the exchange has increased, it has not promoted the activity of centralized market trading. This may also be one of the reasons why the increase in USDT market capitalization has not been reflected in the coin price.

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

Based on the recent changes in the locked-up amount of USDT from specific protocols, on Ethereum, the locked-up amount of USDT in a certain DEX V3, a certain lending protocol, and a certain DeFi protocol V2 has increased in the last month, with the best growth being in the certain DEX V3, which saw an increase of 31.13%. This increase is quite significant, and compared to the beginning of this year, it has also grown by 15.82%. However, compared to last year, the locked-up amount of USDT still shows a noticeable decline. On Tron, the protocol with the best growth saw the locked-up amount of USDT increase by 46.30% in the last month, with an increase of 60.51% this year. The differences in the changes of USDT's locked-up amounts across different protocols are quite distinct.

From a comprehensive multidimensional data perspective, the recently issued USDT has partially flowed into centralized exchanges, but it has not stimulated actual trading; instead, trading volume has continued to shrink. A small portion has also flowed into DeFi protocols, but it has concentrated on a few leading protocols, and the overall scale is still lower than when the market capitalization was the same as before. Another speculation is that the newly issued TRC-20 USDT may have flowed into other payment scenarios.

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

The overall environment of the current market may also be a reason why the market capitalization of USDT has not reflected changes in coin prices. On one hand, many mainstream assets represented by BTC are currently in a sideways adjustment phase. Market data shows that, despite BTC's price being on an upward trend this year, this trend is approaching a "step" shape, with a longer platform construction period and reduced daily price fluctuations. In such a situation, funds may choose to continue observing. This is reflected in the data as an increase in exchange inventory but a decrease in trading volume.

On the other hand, during the Sideways phase of the market, user activity has also declined. The number of independent active addresses on-chain has always been a good window to observe the 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 has not reached a new high for the year. Overall, there has been no significant growth in the active user scale of BTC.

In contrast, the number of independently active addresses on the ERC-20 USDT chain has shown a significant downward trend this year, currently around 56,800, which is a noticeable decrease from the highest single-day independent active address count of 149,900 within the year, and compared to this year's average daily independent active address count of 87,000.