The popularity of stablecoins has fallen to its lowest level since the end of 2020

In May, the activity of stablecoin holders dropped sharply, with trading volume falling to its lowest level since the end of 2020.

According to The Block analysts, stablecoins deployed on Ethereum are currently the least popular. The reason is the high cost of transaction fees. Users are massively switching to the Solana and Polygon blockchains, which offer lower fees.

USDC’s trading volume over the past three weeks amounted to only $ 73.1 billion, while in April it exceeded $ 158.9 billion. A similar situation is observed with Tether (USDT). While in April, investors realized deals worth $ 110.6 billion, in May, this figure dropped below $ 69 billion.

«This is most likely due to high fees on ethereum, which has led to a decrease in the use of stablecoins. USDC and USDT trading volume has really dro pped off,» said Block Research analyst Rebecca Stevens.

The weakening of the activity of holders of digital currencies with dollar backing has led to less capital flowing into bitcoin and ethereum. The range of fluctuations in their value has dropped to a multi-month low.