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A new report from blockchain analytics firm CryptoQuant suggests that the increasing supply of stablecoins in circulation could be a key driver of the next cryptocurrency market rally.
According to the latest CryptoQuant Weekly Crypto report, liquidity conditions in the crypto market, as measured by the total value of stablecoins in circulation, have improved significantly since the U.S. presidential election. Analysts note that historically, increased liquidity via stablecoins has been linked to sustained increases in cryptocurrency prices.
“Historically, increased liquidity through stablecoins has been associated with sustained gains in crypto markets,” CryptoQuant analysts wrote.
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Data from the report shows that the total market capitalization of stablecoins recently reached an all-time high of $204 billion. This is an increase of $37 billion since November 4, 2024, when Donald Trump won the US presidential election.
The primary driver of this growth has been Tether’s USDT ($1.00), although Circle’s USDC ($1.00) stablecoin has also shown renewed momentum. CryptoQuant data reveals that USDT deposits on centralized exchanges have surged 41%, from $30.5 billion on November 4, 2024, to $43 billion today.
“The aggregate value of stablecoins is a significant source of liquidity for trading on exchanges, and its expansion is generally associated with higher crypto prices,” the report said.
*This is not investment advice.
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