Stable coins drop in the market

 The cryptocurrency market has lost steam even the stable coins too. Although the debate is not about price levels, supply fell in April, yet it appears to be dwindling already for some projects like BUSD.

Terra is the root of all evil:

Since the drop had already started in April, the fall of Terra had a strong impact on the stable coin market.

In fact, the decline in the supply of stable coins is partly due to the collapse of the Terra ecosystem.

For many observers, fears about the potential bankruptcy of some crypto investors are undermining the market, fears that did not exist in 2020 when the market plunged due to the Corona crisis.

Terra's downfall also immediately translated into intense fear in the markets shortly after the UST unwinded against the dollar and Tether's USDT was also unleashed. Losing up to 5% against the dollar before returning to parity, but the market symbolically shuddered and may have let the downside fall. Stable currency has more effects than expected.

The DAI de MakerDAO project was also affected, which saw 40% of its supply withdrawn after the largest liquidation event in its history.

The market is now approaching 150 billion dollars!

At its peak, the value of the stable coin market was more than $200 billion. In the wake of the decline in the cryptocurrency market marked by the collapse in the price of Bitcoin, the demand for these stable coins also contradicts.

Today, the market is still dominated by the stable coin Tether, which ranks third in the cryptocurrency market for a global market of $69 billion. However, during the months of April and May, USDT witnessed a drop of more than $7 billion in market capitalization.

Followed by the US dollar USDC with 55 billion valuations and then Binance.USD with 17 billion dollars.

For these last two originals, they experienced a sharp drop in supply in May

It appears that the downtrend has declined in recent days.

What is the sign of losing user trust?

In recent weeks, crypto enthusiasts have been filled with bad news since the fall of the Terra ecosystem, as Celsius and investment fund Theree Arrows capital struggled, and hence the rise of Finblox staking.

However, the decline in stable coin supply was already underway before these stormy episodes, as last April the stable coin supply had shrunk by more than $8 billion.

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