Report: Traders are shifting from fiat currency to stablecoins, with euro stablecoin trading volume surging tenfold in the past month.

Kaiko pointed out in its market analysis that the 60-day realized volatility of BTC has steadily declined over the past decade, reaching a multi-year low before the U.S. election. Altcoins have also experienced a similar trend, with both ETH and SOL significantly dropping from their annual highs in November. However, this situation began to change following the election and President Trump's victory. Notably, the volatility of XRP surged sharply, with realized volatility rising over 100% for the first time since July 2023.
The recent rise in cryptocurrencies has triggered an increased demand for liquidity in stablecoins both off-chain and on-chain. Since late October, the cost of borrowing USDT and USDC from Binance has more than doubled. While these rates typically fluctuate based on market conditions and supply-demand dynamics, this increase indicates a growing demand for leveraged positions in the spot and futures markets. Meanwhile, the market capitalization of stablecoins has also reached an all-time high.
Additionally, the borrowing rates for stablecoins on Aave V3 also increased in November.
In recent months, the cumulative trading volume delta (CVD) of USDT-USD shows that since November, net buying volume has significantly increased, indicating that traders are shifting from fiat currency to stablecoins. The dominance of USDT relative to other dollar-backed stablecoins soared from 69% at the beginning of November to a 13-month high of 86% on November 26, before retreating to 80% last week.
Over the past month, the trading volume of euro-backed stablecoins surged tenfold, rising from $5 million daily in October to over $70 million at the annual peak in early November, with a slight decline last week. Since 2022, the volume has consistently remained above $20 million daily, indicating strong demand. This increase is primarily driven by the Eurite (EURI) stablecoin and Circle's EURC, which together accounted for over 90% of the total trading volume in November. While EURC remains the market leader with about 50% market share, the MiCA-compliant stablecoin EURI gained attention after its launch on Binance at the end of August.