Tron Just Added $2.2 Billion in Stablecoins in July. Does That Make It a Buy?

Tron is a network dedicated to being a stablecoin transfer rail.

So, it's good for the network's health when more stablecoins are onboarded.

But that doesn't necessarily mean that it's good for those who hold the Tron coin.

The stablecoin network Tron (CRYPTO: TRX) onboarded about $2.2 billion in stablecoins in the 30-day period ending on Aug. 4, lifting the total value parked on its network to $91.6 billion. Over the same stretch, the whole stablecoin market shrank by $2.7 billion.

A coin gaining while the asset that underpins its entire chain is receding sure looks like a bullish signal. But there's a bit more going on under the hood here, so let's investigate in more detail whether Tron is actually worth buying or not.

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Tron's stablecoin float was already near $89.4 billion a month ago, making the newly onboarded assets a 2.4% increase. That's not bad at all, but it isn't transformational for the network's capabilities or growth prospects, nor for the thesis in favor of buying its coin.

The main reason it's hard to celebrate the network's new inflows is that its stablecoin base is highly concentrated, leaving it exposed to significant risks beyond its control. Tether accounts for 97.9% of stablecoin dollars on the chain, so it has a significant say in Tron's fate.