The Stablecoins Market Cap has reached $224B USD while the TVL of the whole crypto market shows $106B.
Until the time right before the end of the last bull market in May 2022, Stablecoins' Market Cap was lower than the total TVL.
The asset market seems to be entering a new phase where many traders and investors move capital to safe assets like bonds or stablecoins to preserve value. This stablecoins market cap increase may be a signal for this asset market trend.
If this is one of the reasons for the stablecoins market cap increase, this contains 2 intentions.
First, investors may want to preserve the asset value and wait for the bottom to buy and expect the next bounding phase. This inversion of the relationship between stablecoin market cap and TVL may indicate a shift to risk aversion.
And in addition to this investment view, the increased adoption of stablecoins is clear as well.
Stablecoins are being used more and more in everyday transactions and remittances, threatening legacy currency and payment networks like VISA, Mastercard and AMEX.
And Stablecoins may be used as a starting point for DeFi platforms. Stablecoins could be easily converted to backbone currencies like ETH or Solana or any other token easily through swap or dex platforms. And I guess that many lending platforms may try to avoid any possible risks that could liquidate much portion of asset in the protocols. Many lending protocols experienced this cases through last bear market very painfully.
This cautious approach reflects a desire to protect capital and position themselves to capitalize on next opportunities.
Simply saying, many stakeholders may try to avoid an upcoming possible market downturn and prepare the next rebounding phase. And newly issued stablecoins also would be used for the next bull time.
