Stablecoins see drastic drop in Ethereum trading amid memecoin frenzy

The memecoin frenzy earlier this month -- which saw active bitcoin users plummet and users flock to Solana -- seems to be disrupting activity elsewhere, with the volume of Ethereum on-chain stablecoin trading this month on track to be the lowest since Dec. 2020.

On-chain trading of USDC has reached only $73.1 billion so far this month, less than half the $158.9 billion that changed hands in April, according to data from The Block.

Nearly $69 billion of Tether's USDT has changed so far this month, after seeing volume last month of $110.6 billion. 

"It's likely caused by high fees on Ethereum resulting in a drawback of stablecoin activity," The Block data research analyst Rebecca Stevens said, pointing out that most trading attention this month had been focused on memecoins.

"USDC's volume relative to USDT's volume has really fallen off," Stevens added. "This seems to be a result of the depegging. Its supply has also dropped so there's also less USDC to trade."

The Binance USD stablecoin has seen a significant decline in volumes since February when minting was stopped, she said. 

While the average transaction fee on Ethereum has come down after peaking this month on May 11, the 7-day moving average is still well above levels seen earlier this year.