Report: Traders are turning from fiat currencies to stablecoins, with Euro stablecoin trading volume surging tenfold in the past month

Kaiko noted in its market analysis that BTC’s 60-day realized volatility has steadily declined over the past decade, reaching multi-year lows before the U.S. election. Altcoins have experienced a similar trend, with both ETH and SOL falling sharply from their yearly highs in November. However, this has begun to change since the election and President Trump’s victory. XRP’s volatility, in particular, has risen sharply, with realized volatility rising by more than 100% for the first time since July 2023. The recent rise in cryptocurrencies has triggered an increase in demand for stablecoin liquidity both off-chain and on-chain. The cost of borrowing USDT and USDC from Binance has more than doubled since late October. While these rates typically fluctuate based on market conditions and supply and demand dynamics, this increase indicates an increase in demand for leveraged positions in both spot and futures markets. At the same time, stablecoin market capitalization has also hit a new all-time high. In addition, stablecoin lending rates on Aave V3 also rose in November. USDT-USD cumulative volume delta (CVD) in recent months shows a sharp increase in net buying since November, indicating that traders are shifting from fiat currencies to stablecoins. USDT's dominance over other dollar-backed stablecoins surged from 69% in early November to a 13-month high of 86% on November 26, before falling back to 80% last week. Euro-backed stablecoin trading volume surged tenfold over the past month, from $5 million per day in October to a yearly high of more than $70 million in early November, before falling back slightly last week. Trading volume has remained above $20 million per day for the longest time since 2022, indicating strong demand. This growth was mainly driven by the Eurite (EURI) stablecoin and Circle's EURC, which accounted for more than 90% of total trading volume in November. While EURC remains the market leader with around 50% market share, MiCA-compliant stablecoin EURI has gained traction after launching on Binance in late August.