Stablecoin Market Cap Hits All-Time High of $168 Billion After 11 Months of Growth
Date: 2024-08-26 Author: Oliver Abernathy Categories: CRYPTO PAYMENTS
According to DeFiLlama, the market cap of $168 billion was a new all-time high, surpassing the previous peak in March 2022.
This data does not include algorithmic stablecoins, which maintain their value through algorithmic mechanisms rather than external assets like fiat currency or gold.
The market previously peaked at $167 billion in March 2022, but saw a sharp decline later that year, ending the year at $135 billion.
New Money Flows into Crypto
Crypto analyst Patrick Scott, known in the industry as “Dynamo DeFi,” noted that the rise in the market value of stablecoins is a positive for the crypto market.
“New money is coming into crypto,” he wrote on X in response to the market cap milestone.
“And just like that, we’ve hit a new all-time high.” The total stablecoin market, excluding algorithmic stablecoins, is now at its highest ever, surpassing the previous high in early 2022.”
While Scott didn’t give specific reasons for the market’s rally, he noted that retail participation has been going on for at least eight months.
Tether (USDT), the leading stablecoin, has played a key role in this growth. At the start of 2024, USDT’s market cap was $91.69 billion.
It has since grown steadily every month, reaching a market cap of over $117 billion by August.
Circle’s USD Coin (USDC) has also been growing throughout the year, reaching a market cap of over $34 billion, its highest point in 2024.
However, this figure remains well below the all-time high of $55.8 billion reached in June 2022.
Despite the market cap growth, stablecoin trading volumes have declined.
Stablecoin mining has driven BTC to $65,000: Matrixport
According to Matrixport, stablecoin mining has been a key driver of Bitcoin’s recent surge to $65,000.
The consistent creation of stablecoins has driven Bitcoin’s significant gains over the past 2-3 weeks, serving as a vital fiat entry point into the cryptocurrency market.
While Bitcoin Spot ETFs have also seen increased inflows, Matrixport’s analysis shows that the main driver of Bitcoin’s price growth is the continued inflow of stablecoins.
This trend suggests that institutional investors using stablecoins as an entry point into the cryptocurrency market may be behind the current surge.
Notably, the stablecoin market, currently valued at over $140 billion, remains unregulated.
Last month, Senators Cynthia Lummis and Kirsten Gillibrand joined forces and proposed a new bill aimed at regulating stablecoins.
