Stablecoins are growing by dollar value but not as a share of the wider crypto market, JPMorgan says

The market cap for stablecoins has been growing this year, which should be a good sign for the entire cryptocurrency market. The group is up by about $3 billion this month and has grown $34 billion, or 26%, this year, according to CryptoQuant. The total value is currently about $163 billion, approaching a 2022 peak of $180 billion – which it reached before the collapse of the TerraUSD stablecoin and the network's native Luna token.

Stablecoins are cryptocurrencies whose prices are pegged to an underlying asset – usually the U.S. dollar.

Crypto investors watch them closely for evidence of demand, liquidity and activity in the market. They're used for trading on centralized and decentralized exchanges, as collateral in decentralized finance (DeFi) and for peer-to-peer payments. However, while their market cap may be growing, it's not exactly gaining as a proportion of the total market cap of all cryptocurrencies, JPMorgan says.

"While the stablecoin universe has been expanding in dollar terms approaching its previous 2022 peak, its expansion has been largely a reflection of the increase in crypto market cap with little change in the stablecoin market share as [a] percentage of total crypto market cap," JPMorgan analyst Nikolaos Panigirtzoglou said in a note Thursday. "Indeed ..

. the share of stablecoins vs total crypto market cap is little changed this year." He highlighted a few reasons for the change.

New stablecoin issuers and stablecoins like Ethena's USDe, which promis.