In a significant development for the cryptocurrency world, the two largest stablecoins have seen a huge increase in supply over the past week. This growth comes as the broader crypto market bounces back from a recent dip.
Tether (USDT) and USD Coin (USDC), the top two stablecoins by market size, have added nearly $3 billion to their combined supply since Monday. This surge suggests that investors are eager to buy cryptocurrencies at lower prices following the market’s recent downturn.
Stablecoins are digital tokens designed to maintain a steady value, usually tied to a real-world currency like the US dollar. They act as a bridge between traditional money and the crypto market, making it easier for people to trade and invest in digital assets.
Tether, the biggest stablecoin, has minted $1.3 billion worth of new USDT since August 5. This push has driven Tether’s total market value to a record high of over $115 billion.
1.3B $USDT has been transferred from #TetherTreasury to exchanges since the market crash on Aug 5! pic.twitter.com/BYtMqgVRyZ
— Lookonchain (@lookonchain) August 9, 2024
Meanwhile, USDC has grown by about $1.6 billion, reaching $34.5 billion—its highest level since March 2023.
Interesting $USDC movements this week as total circulating supply has increased by $1.56B (4.8%) after experiencing a sharp decline ahead of broader market headwinds. Much of these inflows occurred on Ethereum ($1.34B) and Solana ($356M).
Circulating supply now stands at $34.5B,… pic.twitter.com/qByXfZsdGA
— David Alexander II (@Mega_Fund) August 8, 2024
Much of this new stablecoin money is flowing into cryptocurrency exchanges. Binance, the world’s largest crypto exchange, received over $1.5 billion in USDT and $820 million in USDC deposits in just four days after the market’s Monday slump.
Inflows into Stablecoins Is a Good Sign
Experts see this influx of stablecoins as a positive sign for the crypto market. When more stablecoins enter the system, it often means more people are getting ready to buy cryptocurrencies. This can lead to price increases for popular coins like Bitcoin and Ethereum.
The growth in stablecoins isn’t limited to just one type of investor. According to digital asset broker FalconX, various groups, including hedge funds, venture funds, and everyday retail investors, are all buying in.
This stablecoin boom comes at an interesting time for the crypto market. Bitcoin, the most well-known cryptocurrency, has recovered significantly since hitting a five-month low of about $49,250 on August 5. As of the time of writing, Bitcoin is trading above $60,000, marking a strong comeback.
The surge in stablecoin supply and the rebound in cryptocurrency prices suggest that investor confidence in the digital asset market remains strong, despite recent volatility.
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