In May, activity among holders of stablecoins deployed on Ethereum dropped sharply due to high transaction fees. Users began to switch en masse to the Solana and Polygon blockchains, which offer lower fees, The Block reports.
According to experts, this month the amount of transactions with ETH-based stablecoins will be the lowest since December 2020.
For example, USDC turnover over the past three weeks amounted to only $73.1 billion, while in April it exceeded $158.9 billion. A similar situation is observed with Tether (USDT). If in April investors implemented transactions worth $110.6 billion, then in May this volume dropped below $69 billion.
Block Research analyst Rebecca Stevens emphasized:
This is most likely caused by high fees on Ethereum, which has led to a decrease in the use of stablecoins. USDC and USDT trading volume has indeed dropped dramatically.
Weakening activity among holders of dollar-backed digital currencies has led to less capital flowing into Bitcoin and Ethereum, the range of which has dropped to multi-month lows.
In addition, Binance USD (BUSD) trading has been falling since February. The attractiveness of this token was dealt a blow by Paxful, which announced in February that it would cease issuing it.
