Unprecedented levels of stablecoin market capitalization have been added to the Bitcoin ecosystem, thus providing more liquidity. Historically connected with price rises, this trend could indicate a positive future for Bitcoin and the whole crypto market.
According to recent CryptoQuant statistics, some USD-backed stablecoins today have a total market capitalization of $169 billion. Equivalent to $40 billion in increase, this number shows a significant 31% rise since the beginning of 2024. As seen by stablecoin value, the surge has pushed crypto market liquidity to record highs in late September. Especially in Tether (USDT), centralised exchanges have seen a notable rise in stablecoin balances.
Right now, USDT rules the stablecoin scene. The main force behind this development pattern has been With an all-time high of 22.7 billion this month, Total USDT (ERC20) balances on centralized exchanges mark a 54% increase, or $8 billion, year-to-date.
About $8.5 billion USDT issued on the Tron network is currently kept on centralized exchanges, according to CryptoQuant. "Larger balances of stablecoins on exchanges are positively correlated with higher Bitcoin and crypto prices," said the market analytics platform.
Starting in January 2023, the present bull cycle has seen centralized exchange USDT (ERC20) balances rise by 146%. Over this period, their value has risen from $9.2 billion to $22.7 billion. With its closest rival USD Coin (USDC) holding a 21% share, USDT's market share has reached 71%. Having risen by thirty% or $28 billion since the start of 2024, USDT's market capitalization is almost $120 billion. With its market capitalization of $36 billion—a 44% or $11 billion rise year-to-date—USDC has also seen notable growth.
According to CryptoQuant, almost all the net stablecoin rise noted this year comes from USDT and USDC. Though at a slower rate than previous in the year, both assets show monthly increases. Accelerated development in the monthly market caps of these assets, according to analysts, could indicate a fresh surge in Bitcoin and crypto prices. Given that the top cryptocurrency has been showing a relative price stability, this is especially interesting.
New players are starting to show up in the stablecoin space even as USDT and USDC remain leaders. Developer of the XRP Ledger, Ripple Labs, recently debuted a USD-backed stablecoin called RLUSD. RLUSD reached a market capitalization of $47 million already since its late September introduction. Analyzes think this asset has great growth possibilities.
The rising liquidity brought about by stablecoin expansion could have broad effects on the Bitcoin market. Market players will be closely observing these changes in the next months as historical data points to a link between more liquidity and rising prices.