In the first half of 2025, the US dollar fell by 11% against other major currencies. This downturn creates invisible costs for euro-based traders, pushing them towards euro-denominated settlements.
Growing Preference for Euro-Denominated Trading
On European exchanges, liquidity in euro-quoted trading pairs is increasing. Data from Kaiko shows that liquidity in ETH/EUR markets has doubled over the past year, while trading in USD Tether pairs is steadily declining. For many investors, this is about reducing exposure to volatile exchange rates.
Rising Demand for Euro-Pegged Stablecoins
The demand for euro-backed stablecoins is also growing. Although their market share remains small compared to USD-pegged coins, major assets like Circle’s EURC and Stasis’ EURS have posted double-digit gains in market cap this year.
Challenges to Dollar Dominance
While the euro is gaining traction, analysts emphasize that the dollar's role in the crypto market is not over. USD-backed stablecoins still dominate global liquidity. Nevertheless, the rising trend of euro-based assets indicates a more diversified future for the cryptocurrency market.
The weakness of the dollar is driving changes in traders' preferences, moving them towards greater reliance on the euro for crypto transactions. This may lead to significant shifts in the cryptocurrency landscape in the coming years.
