Global Crypto Market Cap Halved, but Trading Activity Slips Just 1.6% as Stablecoin Use Expands

Global cryptocurrency market capitalization has been cut in half over the past year, but actual crypto economic activity declined only modestly.

Chainalysis said in its seventh annual report, cited by The Block on September 23, that global cryptocurrency economic activity totaled $9.4 trillion in the 12 months ended June 30. That was down 1.6% from $9.5 trillion a year earlier. Over the same period, total crypto market capitalization fell by $2.1 trillion, or about 50%.

By transaction type, inflows into major services such as cryptocurrency exchanges and decentralized finance, or DeFi, totaled $8.9 trillion, down 4.3%. Domestic peer-to-peer, or P2P, transactions, by contrast, surged 302.9% to $228.7 billion.

Cross-border stablecoin transactions rose 77.5% to $220.3 billion from $124.2 billion. Chainalysis said the average cross-border transfer was about $3,000, indicating that growth was driven less by institutional investors than by everyday demand such as payments for goods, remittances and preserving asset value.

Stablecoins also maintained relatively steady balances during the market downturn. Global on-chain asset balances plunged to $440 billion in June from $860 billion in September last year. Stablecoin balances, however, held in a range of $98 billion to $109 billion over the same period.

Brazil ranked first in the global cryptocurrency adoption index. Its crypto economy was estimated at $252.5 billion, followed by the US, Nigeria, Japan and South Korea. The index was calculated using four indicators: service inflows, domestic P2P trading, cross-border fund flows and on-chain asset balances.

By region, Latin America's crypto economy grew 9.8% to $593.8 billion. Trading activity in Brazil fell 1.6%, but Mexico, Argentina, Colombia and Venezuela all posted growth. Venezuela in particular recorded $39.1 billion, up 107.2% from a year earlier.