Stablecoin Market Capitalization Reaches $200 Billion
The stablecoin market capitalization has surged to a record high after experiencing steady growth since mid-2023, according to data from Alphractal.
A report from the data analysis platform on Jan. 31 indicated that the stablecoin market cap climbed 73%, increasing from $121.18 billion in August 2023 to an all-time high of $211 billion.
Meanwhile, USDC has been gaining a competitive advantage over other stablecoins.
When examining the market capitalization of stablecoins other than Tether’s USDT and USDC, the data suggests that growth has remained relatively modest since 2024.
This indicates that USDT and USDC continue to dominate as the most widely preferred stablecoins in the crypto market.
“The rest of the market has not grown significantly since 2023, maintaining stable average values.”
USDT, which holds the largest market share among stablecoins, reached a record-high market cap of $140 billion in December 2023.
As of Jan. 31, its market cap stands at $139.4 billion, maintaining a dominance of 63.84%.
Additional data from CoinMarketCap reveals that USDC’s market capitalization has grown by over 120%, rising from a low of $24.1 billion on Nov. 14, 2023, to $53.4 billion at the time of writing.
This growth has been accompanied by an increase in demand, with USDC pairs reaching an all-time high daily trading volume of $20 billion on Jan. 18.
Consequently, USDC’s market share by capitalization has climbed to 24.6% as of Jan. 31.
A previous Cointelegraph report highlighted a 78% year-over-year expansion in USDC circulation, surpassing the growth rate of all other stablecoins globally.
As of Jan. 31, USDC’s circulating supply is at $53.4 billion—more than double its 2023 low of under $24 billion, according to CoinMarketCap.
Alphractal noted that USDC’s recent surge has been driven by a downturn in altcoins, with investors shifting a substantial portion of their holdings into USDC.
The stablecoin’s market resurgence in 2024 followed a sharp decline in 2023, during which its market value dropped by as much as 45% after the collapse of Silicon Valley Bank (SVB).
USDC’s current dominance is similar to its position at the end of the 2021 bull market cycle, which preceded the 2022 bear market when the price of Bitcoin fell to as low as $15,500 in November 2022.
Alphractal explained:
“If this metric continues to rise, it could be a bearish signal for the crypto market, indicating increased risk aversion. On the other hand, if it declines, it could pave the way for new market highs.”
During the previous bull cycle, USDC’s supply began to increase in May and peaked in March 2022—roughly four months after asset prices reached their highest levels.
Between April 2021 and March 2022, the total stablecoin market cap expanded by 177%, peaking at $167.5 billion.
If the current trend of increasing stablecoin supply continues while crypto prices start declining, the market may be approaching a peak in the coming months.
On the other hand, a growing stablecoin market cap is often linked to increased investor confidence, potentially leading to higher capital inflows.
This could indicate that bullish momentum will persist for a while longer.
Sources:
https://cointelegraph.com/news/stablecoin-market-cap-surpasses-200-b-as-usdc-dominance-rises
Try to invite your friends and earn together
10% of trading fees of your friends and 5% from the earnings of your friends.
