Stablecoins have reached an all-time high market cap of $169.57 billion after nearly a year of uninterrupted growth.
Leading assets like Tether’s USDT and Circle’s USDC have seen a significant resurgence this year, alongside one newcomer.
Stablecoin market cap on the rise
Data collected by DefiLlama revealed This is the highest market cap for stablecoins, surpassing the previous peak of $167 billion set in March 2022, which then declined to $135 billion by the end of the year.
Assessing the latest milestone, cryptocurrency analyst Patrick Scott saying that this new spike indicates a new influx of capital into the cryptocurrency market, suggesting renewed interest and confidence in the space.
“And just like that, we hit a new all-time high. The total stablecoin market cap, excluding algorithmic stablecoins, is now at an all-time high, surpassing its previous high from early 2022. New money is pouring into crypto.”
The growing market cap of stablecoins could be a sign that institutional investors are channeling more funds into cryptocurrencies, but Scott stressed that retail participation has been ongoing for at least eight months.
Topping the chart is the leading stablecoin, USDT, which has seen a market cap increase of roughly 28% year-to-date, rising from around $92 billion at the start of the year to $118 billion at the time of writing. USDT now accounts for around 70% of the entire stablecoin market cap.
Meanwhile, Circle’s USDC has also shown growth in 2024, despite some fluctuations, rising from nearly $24 billion in early January to $34.67 billion as of August 26.
Additionally, PayPal-backed stablecoin PYUSD has also seen an impressive surge. It has overtaken USDD to rank as the fifth-largest stablecoin, with a market cap that surpassed $1 billion over the weekend.
Rising market cap hasn’t stopped stablecoin trading volumes from falling. CCData reported An 8.35% decline in trading volumes in July to $795 billion, driven by lower activity in centralized markets and regulatory issues in Europe due to the Markets in Crypto-Assets Regulation (MiCA). This downward trend continued in August, with current volumes at just around $52 billion.
Stablecoin minting boosts Bitcoin
Bitcoin’s recent surge to $65,000 has been significantly influenced by stablecoin minting, according to the latest report from Matrixport RecommendationsDespite the capital inflows into Bitcoin spot ETFs, the constant minting of stablecoins has emerged as the main driver of this bullish momentum over the past two weeks.
Serving as a crucial on-ramp to the cryptocurrency market, stablecoin activity appears to be the key factor supporting BTC’s rise.
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