The Euro-U.S. dollar exchange (EUR/USD), the world’s most liquid foreign exchange pair, has surged 12.88% in the first half, outperforming Nasdaq and S&P 500 and nearly rivaling bitcoin BTC 14.8% rise, according to data source TradingView.
The strength of the euro has increased the appeal of stablecoins with values pegged to the euro.
The cumulative market cap of 21 euro-pegged stablecoins tracked by data source Coingecko has increased 44% from $310 million to $480 million. Leading the growth is the U.S.-listed Circle’s EURC stablecoin, whose market cap has increased by 138% to $200.36 million.
“One of my bets trades this year was to move my entire stablecoin stack from USDC/USDT into a Euro-denominated stablecoin like EURC. Up 13% in dollar value in less than 5 months,” Legendary, the pseudonymous host of The Modern Market Show, announced on X.
While the demand for euro-pegged stablecoins has increased, their combined market cap remains less than 1% of that of dollar-pegged stablecoins, which boast a cumulative market value of $254.88 billion.
EUR/USD has risen from 1.0354 to nearly 1.17, hitting the highest since September 2021. The upswing is characterized by a breakdown in the correlation between the exchange rate and the differential between the Fed and ECB interest rates, as well as a broad-based shift away from the US dollar.
The 90-day correlation coefficient between EUR/USD and bitcoin has recently jumped to 0.62, the highest since February 2024, indicating a moderate positive correlation between the two.
