Stablecoins Hit Record High Supply Hinting Further Bullish Momentum

• Increased demand for liquidity and trading activity is reflected in the growth of the stablecoin market cap.
• The netflow of USDT to exchanges has surpassed $1.8B, which coincides with a rising market valuation.

With a total supply of almost $176.2 billion, stablecoins are at an all-time high. Token Terminal data shows that stablecoin supply has been rising again after a dip in the middle of 2022 and the beginning of 2023. When it probably reflected wider market retracements during the crypto winter.

There has been a steady increase in the aggregate supply ever since. Although the total amount of stablecoins has exploded, the market capitalization of the most valuable of these assets has grown at an even faster rate.

Market capitalizations of Tether (USDT) and Circle (USDC) increased by 7% and 6%, respectively, with $8 billion and roughly $2 billion in additions since November 5th, according to statistics by CoinMarketCap.

Purchasing Power on the Edge

Moreover, to keep the cryptocurrency markets liquid, stablecoins—which are usually tied to the dollar—are needed as a reserve to buy assets. On international exchanges, USDT is the most actively traded cryptocurrency. Although USDC is frequently utilized on US platforms such as Coinbase and DeFi networks.

Increased demand for liquidity and trading activity is reflected in the growth of the stablecoin market cap. It is often believed that this tendency will lead to an increase in market activity. As a demonstration of faith in the market, investors who own stablecoins are effectively hoarding “dry powder” that may be used when needed.

New data from CryptoQuant shows that the netflow of USDT to exchanges has surpassed $1.8 billion. Which coincides with a rising market valuation. This dramatic rise in stablecoin influx shows that purchasing power has skyrocketed. This pattern is indicative of investors preparing for possible market movements.

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