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All you need to know about Ethereum stablecoins’ market cap hitting new high
The total value of all outstanding Ethereum-based stablecoins has reached a historic milestone, with the overall market capitalization reaching an unprecedented $205.79 billion. This significant development is mainly attributed to Ethereum’s dominance in this space, accounting for 54.32% of the global stablecoin count.
In more recent times, the Ethereum network has witnessed substantial inflows into its stablecoins over the past two months. As a result, the blockchain has successfully surpassed its previous all-time high achieved back in February of last year. The impressive growth is primarily due to the robust influx of funds into these digital assets.
This remarkable achievement should theoretically have a positive impact on investor confidence and potentially signal budding network growth. However, it’s essential to consider that Ethereum’s TVL (total value locked) has been experiencing a decline for some time now. This downturn can be largely attributed to the unfavorable price fluctuations in ETH, coupled with an IRS announcement that will require tax payments on unrealized profits from staking rewards.
In light of this recent development, investors are becoming increasingly wary about the future prospects of staking their cryptocurrencies, potentially leading to a decrease in TVL outflows. The current scenario may also trigger some instability as a result of the regulatory challenges presented by these headwinds.
The market is currently experiencing an increase in USDT-related FUD (fear, uncertainty, and doubt) stemming from concerns about USDT being delisted in the UK due to non-compliance issues. In light of this, it’s crucial for investors to remain vigilant regarding such regulatory hurdles as they may have a profound impact on Ethereum’s stablecoin growth.
It is essential to emphasize that these current regulatory headwinds will likely be short-lived and clarity from authorities should help clear the market in the long run. This could ultimately pave the way for a potential recovery.
Source: ambcrypto.com
