Stablecoins have reached an all-time high market cap of $169.57 billion following nearly a year of uninterrupted growth.
Leading assets such as Tether’s USDT and Circle’s USDC have seen a significant resurgence this year, in addition to a newcomer.
Stablecoin Market Cap Surge
Data compiled by DefiLlama revealed that this is the highest market cap for stablecoins, surpassing the previous peak of $167 billion established in March 2022, which later declined to $135 billion by year’s end.
Weighing on the latest milestone, crypto analyst Patrick Scott said that this new peak indicates a fresh influx of capital into the crypto market, suggesting renewed interest and confidence in the space.
“And just like that, we’re at a new all-time high. The total stablecoin market cap, excluding algorithmic stables, is now at the highest point ever, surpassing its previous high from early 2022. New money is entering crypto.”
The growing stablecoin market cap might be a sign that institutional investors are funneling more funds into crypto, but Scott emphasized that retail participation has been ongoing for at least eight months.
Topping the chart is the leading stablecoin – USDT – which has experienced a market cap increase of approximately 28% so far this year, rising from around $92 billion at the start of the year to $118 billion at the time of writing. USDT now makes up around 70% of the entire stablecoin market cap.
Meanwhile, Circle’s USDC has also shown growth in 2024, despite some fluctuations, rising from almost $24 billion in early January to $34.67 billion as of August 26th.
Additionally, the PayPal-backed PYUSD stablecoin has also witnessed an impressive increase. It has surpassed USDD to position itself as the fifth largest stablecoin, with a market cap exceeding $1 billion over the weekend.
The rise in the market cap hasn’t stopped stablecoin trading volumes from dropping. CCData reported an 8.35% reduction in July’s trading volumes, down to $795 billion, driven by less activity on centralized exchanges and regulatory issues in Europe owing to the Markets in Crypto-Assets Regulation (MiCA). This downward trend continued into August, with current volumes of just around $52 billion.
Stablecoin Minting Pushes Bitcoin
Bitcoin’s recent rise to $65,000 has been significantly influenced by stablecoin minting, according to Matrixport’s latest findings. Despite the inflows into spot Bitcoin ETFs, the steady minting of stablecoins has emerged as the primary driver behind this upward momentum over the last two weeks.
Serving as a crucial fiat on-ramp into the crypto market, stablecoin activity appears to be the key factor backing BTC’s surge.