Recently, there’s been a noteworthy resurgence in the domain of stablecoins, which have now crossed the $200 billion market cap milestone. Information provided by Alphractal reveals that the total capitalization of this segment has rocketed to an unprecedented $211 billion, following a consistent growth pattern since mid-2023.
Compared to its $121 billion value in August 2023, the stablecoins’ market cap has shot up by 73%, according to data published on January 31st. Tether’s USDT continues to be the predominant catalyst for this growth, but interestingly, USDC has been making significant strides lately.
Tether’s USDT is still the primary driver of growth since 2023, with the total valuation of stablecoins currently standing at $223 billion, a marginal 0.2% increase from the previous day. The growth is mainly attributed to USDT and USDC, despite the overall stablecoins market remaining relatively static since 2023, demonstrating modest and consistent figures. Tether’s USDT is currently valued at nearly $140 billion, whereas USDC stands at $53 billion.
Recent posts from Alphractal on Twitter suggest that the USDC is slowly but surely gaining a competitive edge in the stablecoins market, possibly due to a dip in altcoin prices and subsequent sell-offs being converted into USDC. This shift has seen USDC’s dominance hit a crucial resistance level, identical to the one observed in 2021, which marked the beginning of the bear market in 2022 when Bitcoin’s price plummeted to as low as $15,500. If this trend is sustained, it could potentially indicate a bearish market, influencing investors’ choices.
During the last bull run, USDC’s supply spiked in May and peaked in March 2022. From April 2021 to March 2022, the market cap of the stablecoin rose by 170%. If the coin supply continues to grow while the price starts to decline, this could signal that the stablecoin market might reach its zenith in the coming months. Traditionally, a rising market cap for stablecoins is indicative of increased investor confidence, suggesting a likely upswing in capital inflows. Conversely, a growing stablecoin market cap can also signal enhanced investor sentiment, hinting at potential capital influx, thereby indicating the possibility of the bullish momentum extending for a few more months.
