A new report from CryptoQuant highlighted that the expansion of stablecoins in circulation is likely to be a key driver for the next cryptocurrency rally.
Liquidity conditions in the crypto markets, as measured by the total value of stablecoins in circulation, have experienced a boost since the U.S. Presidential election, according to the CryptoQuant Weekly Crypto report.
"Historically, growing liquidity via stablecoins is associated with sustained gains in crypto markets," CryptoQuant analysts said.
Data from the report showed that the total market capitalization of stablecoins recently surpassed $200 billion, reaching a new all-time high of $204 billion. This marks a significant growth of $37 billion since Nov. 4, 2024, when Donald Trump won the U.S. presidential election.
Stablecoin total market capitalization has reached an all-time high of over $204 billion. Image: CryptoQuant
The report attributes this growth primarily to Tether’s USDT, although Circle’s USDC has also regained momentum. The data showed that USDT deposits on centralized exchanges has risen from $30.5 billion on Nov. 4, 2024, to $43 billion today, a 41% increase.
"The total value of stablecoins is an important source of liquidity for trading on exchanges and its expansion is generally associated with higher crypto prices," CryptoQuant analysts said.
A CEX.io report highlighted that stablecoin transfer volume in 2024 surpassed the combined transaction volume of Visa and Mastercard by more than 7.68%.
The total stablecoin transfer volume for the year reached $27.6 trillion, slightly exceeding the $23.8 trillion from Visa and Mastercard combined.
The report also revealed that 70% of stablecoin transaction volume in 2024 was driven by bot activity, with Solana and Base networks seeing bot transactions account for an astounding 98% of the volume. Additionally, the report found that yield-bearing stablecoins now represent over 3% of the stablecoin market, contributing to a 414% surge in the market cap of tokenized treasuries.
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