The notorious failure of the Terra USD (UST) stablecoin affected the crypto market, however the algorithmic stablecoins took the harshest punch. Since its peak in April 2022, the marketplace share of algorithmic stablecoins diminished almost tenfold.

According to a brand-new report from CryptoCompare, the present market share of algorithmic stablecoins stands at 1.71%, while its all-time high record in April 2022 reached 12.4% of the whole crypto market. Before its crash, Terra USD represented 79.8% of the algorithmic stablecoin’s market share.

The stablecoin market is generally suffering, with January ending up being the tenth successive month of decline in its market capitalization. In December 2022, centralized exchanges saw a net outflow of $3.65 billion in stablecoins– the biggest because November 2021. According to CryptoCompare:

“The decrease in stablecoin supremacy recommends market participants are rotating out of stablecoins and into risk possessions.”

Tether (USDT), USD Coin (USDC) and Binance USD (BUSD) stay the leaders in the stablecoin market, with USDT accounting for 48.7% of the marketplace share– the greatest dominance tape-recorded given that October 2021.

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The report likewise highlights the so-called “stablecoin war,” warmed up by Coinbase’s choice to present a zero-fee trade to switch USDT for USDC in December 2022. Minted by the exchange, USDC presently represents less than 1% of the stablecoins trading volume on Coinbase. Earlier in 2022, Binance likewise introduced its BUSD auto-conversion function, which immediately converted users’ balances of USDC, USDP and TrueUSD to BUSD on a 1:1 basis.

In late January, the CEO of Visa, Al Kelly, expressed his beliefthat, in addition to reserve bank digital currencies, stablecoins have the prospective to play a meaningful role in the payments area.