A “bearish lull” in the crypto market fuelled growth in stablecoins, with the market capitalization of the top five stablecoins growing by 13% in the first quarter, according to a new report from the coin tracking site CoinGecko.

The growth in the market capitalization of stablecoins is notable given that it happened during a period of falling trading volumes and prices in the crypto market in general.

According to CoinGecko, the increase in the market capitalization of the top five stablecoins -- which included tether (USDT), USD coin (USDC), binance USD (BUSD), terraUSD (UST), and DAI -- can be attributed to crypto investors “derisking in the midst of geopolitical and macroeconomic uncertainties.”

Top 5 stablecoins market capitalization and trading volume (Oct 2021 – Mar 2022):

The report noted that USDT remains the dominant stablecoin in the market, although the growth of this coin “has slowed greatly” compared to USDC, BUSD, and UST.

Similarly, it said that the growth of DAI, the decentralized stablecoin issued by MakerDAO (MKR), “has also slowed significantly” compared to its peers.

Out of the top five stablecoins, UST saw the strongest percentage growth in market capitalization over the course of the first quarter, while USDC increased its market capitalization the most in absolute terms, the report said.

Commenting on the rise of UST, the decentralized stablecoin issued on the Terra (LUNA) protocol, CoinGecko’s report said that the coin has seen its market capitalization grow by 61% to USD 16.3bn as of the end of the quarter.

At the same time, DAI’s market capitalization increased by only 3%, the report pointed out.

With the impressive growth over the quarter and the overtaking of DAI in December, UST has now consolidated