Traders Shift to Stablecoins Amid Rising Demand and Surging Euro Stablecoin Transactions

In Brief:

BTC's 60-day realized volatility hit a multi-year low pre-election but surged post-election, alongside a rise in XRP volatility exceeding 100%.

Euro-backed stablecoin trading volume surged tenfold in November, driven by EURI and EURC, maintaining daily volumes above $20M—the longest streak since 2022.

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Detailed Analysis:

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A report from Kaiko highlights notable shifts in the cryptocurrency market as traders increasingly transition from fiat currencies to stablecoins. Key metrics show Bitcoin's 60-day realized volatility plummeting to a multi-year low before the U.S. presidential election, only to rise again following President Trump's victory. Altcoins like XRP saw heightened volatility, with realized volatility jumping over 100%, reflecting renewed trading activity.

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The growing demand for stablecoins is evident on multiple fronts. Borrowing costs for USDT and USDC on Binance have more than doubled since October, signaling increased leverage in spot and futures markets. Simultaneously, stablecoin market capitalizations reached record highs, further indicating their growing dominance in crypto trading.

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Euro-backed stablecoins have shown particularly impressive growth, with trading volumes jumping tenfold from $5 million per day in October to over $70 million in early November. Despite retreating slightly, volumes remain strong at over $20 million daily—the longest sustained high since 2022. This surge was driven by the MiCA-compliant Eurite (EURI) and Circle’s EURC, which together accounted for over 90% of the volume in November. EURI's market share increased notably after its Binance launch in August, while EURC remains the leader at 50%.

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Market Implications:

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The trend towards stablecoin adoption underscores their increasing role as a bridge between fiat and crypto markets, fueled by rising demand for liquidity and market volatility. The sustained growth in euro-backed stablecoins highlights the evolving preference for diversified stablecoin options aligned with regional currencies and regulatory frameworks.

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