The supply of the two leading stablecoins, Tether’s USDT and Circle’s USDC, has surged nearly $3 billion in just one week, signaling renewed investor confidence and a rebound in the cryptocurrency market following a recent downturn.
Since Monday, Tether has transferred approximately $1.3 billion worth of USDT to exchanges and market makers, according to blockchain analytics firm Lookonchain. This substantial movement has driven USDT’s market capitalization to a new record high of over $115 billion.
Similarly, USDC, the second-largest stablecoin, saw its market capitalization increase by about $1.6 billion this week, reaching $34.5 billion, its highest level since March 2023. Data from TradingView reveals that the majority of this growth occurred on the Ethereum network, with $1.36 billion in inflows, while USDC on Solana attracted $356 million.
The surge in stablecoin supply comes as investors have been shifting funds to exchanges following the recent market sell-off. Binance, the world’s largest cryptocurrency exchange, reported receiving over $1.5 billion in USDT deposits and $820 million in USDC deposits within four days of Monday’s market crash, as per data from DefiLlama.
Digital asset broker FalconX observed significant buying activity, noting that “pretty much all investor” categories, including hedge funds, venture funds, and retail aggregators, were net buyers during this period.
Stablecoins, which are digital tokens pegged to traditional fiat currencies, play a crucial role in the crypto ecosystem by providing liquidity for trading and lending. An increase in stablecoin supply often indicates a healthy and active market.
The total stablecoin market cap experienced rapid growth from November to March, aligning with the cryptocurrency rally and Bitcoin’s peak above $72,000. After a period of stagnation as the market cooled, recent data suggests a resurgence in stablecoin activity, reflecting renewed optimism and trading activity in the crypto space.
