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Posted: December 12, 2023
- Did you know that transactions worth more than $7 trillion were settled using stablecoins last year?
- The circulating supply of ERC-20 stablecoins saw a noticeable hike lately.
Slowly but surely, stablecoins are conquering the global market as a viable medium of exchange. Recent data shows that transactions worth more than $7 trillion were settled using stablecoins in the last year. This significant milestone outshines the combined global settlements of $14 trillion by payment giants Visa and Mastercard.
Focus back on stablecoins
Unlike some other volatile cryptocurrencies, stablecoins remain closely tied to fiat currencies, especially the U.S. Dollar (USD). This unique combination of decentralization and stability in market value has expanded the scope of stablecoins in recent years.
According to AMBCrypto’s examination of CryptoQuant, the circulating supply of ERC-20 stablecoins has seen a noticeable increase in the past month.
Source: CryptoQuant
Such hikes in stablecoin market caps act as bullish signals for the broader crypto-market because most traders use stablecoins to enter and exit trades on crypto-exchanges.
The stablecoin market cap took a hit after the dramatic collapse of Terra USD [UST] last year. But the recent bullish vigor in the last two months has put the focus back on these crypto-derivatives of currencies.
Will stablecoins continue aiding the bull run?
Before the market rally that started in mid-October, Tether [USDT] supply on exchanges gradually increased. In fact, from August to October, about 3.54% of the supply moved into exchanges, AMBCrypto found using Santiment data. This move was likely done to buy other cryptocurrencies.
After a drop in supply in November, USDT reserves on exchanges were again back to October levels at press time. If history is any guide, this could be a precursor to another burst of buying activity in the coming days.
Source: Santiment
Solana drives stablecoin growth
Finally, according to AMBCrypto’s examination of DeFiLlama data, Solana [SOL] saw the highest growth in stablecoin supply over the past week, at over 8%.
The surge was fueled by a 21% jump in USDC deposits while USDT supply largely remained unchanged.