Stablecoins Driving Liquidity Surge as Market Capitalization Reaches $169 Billion

Oct. 14, 2024. 1 min. read.

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Crypto market liquidity is experiencing a significant boost, with the total market capitalization of USD-backed stablecoins hitting $169 billion in late September, marking a 31% increase since the start of the year, according to CryptoQuant data. The surge is largely attributed to Tether’s USDT, which has seen substantial growth on centralized exchanges.

Tether’s USDT, issued as ERC20 on Ethereum, has experienced a 54% increase in balances on exchanges, reaching 22.7 billion in October—an $8 billion rise since January. Additionally, $8.5 billion of USDT has been issued on the TRON network, contributing further to liquidity. These elevated stablecoin balances correlate positively with rising cryptocurrency prices, despite Bitcoin’s price remaining relatively stable, even after a 20% growth in USDT balances since August.

“The increase in USDT on exchanges reflects heightened liquidity and potential for market shifts,” analysts note, pointing to the possible influence on overall crypto market dynamics.

Since the onset of the bull cycle in January 2023, USDT (ERC20) balances on exchanges have surged from $9.2 billion to $22.7 billion, a remarkable 146% rise. This influx of stablecoins into the market suggests growing liquidity and the possibility of further movement in crypto prices.

In parallel, Ripple has made its entry into the stablecoin space with the launch of RLUSD, a US dollar-backed stablecoin. Introduced in late September, RLUSD has achieved a market capitalization of $47 million and is operational on both the XRP Ledger and Ethereum networks. This move further cements Ripple’s position in the growing market for remittances and cross-border money transfers.

With the increased liquidity provided by stablecoins like USDT and Ripple’s RLUSD, the crypto market may be poised for significant shifts in the coming months.

Source: Tether fuels market liquidity surge as stablecoins reach $169 billion

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