Active Engagement of Crypto Investor Capital

The record $300 billion stablecoin market capitalization may indicate an influx of investor capital into onchain activities, potentially serving as “rocket fuel” for cryptocurrency valuations, market analysts suggest.

The total stablecoin supply hit a new high of over $300 billion on Friday, representing a 46.8% growth rate year-to-date, which could surpass last year’s market growth, as reported by Cointelegraph.

This milestone comes at the beginning of October, historically the second-best month for Bitcoin (BTC), bolstering investor optimism for a possible “Uptober” rally.

“Although the stablecoin supply has exceeded 300 billion dollars, this is not capital sitting idle. It is actively circulating within the markets,” stated Andrei Grachev, founding partner at the synthetic dollar protocol Falcon Finance.

“Transfer volumes reach into the trillions each month. Velocity metrics indicate ongoing activity throughout networks,” Grachev shared with Cointelegraph. “These funds are being utilized—not merely held. This is capital in action, not capital on pause.”

“Stablecoins facilitate trades, fund positions, and provide users with dollar access where traditional banks fall short,” he added.

Stablecoins serve numerous functions beyond investment, including payments, remittances, merchant transactions, and as savings instruments. An increasing supply could also suggest broader stablecoin use for everyday payments and institutional settlements.

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$300 billion stablecoin supply may be “rocket fuel” for crypto

The $300 billion milestone could signal a “recovery in digital assets” alongside a growing integration of stablecoins into global finance, according to Ricardo Santos, chief technical officer at stablecoin-based fintech payment firm Mansa Finance.

The expansion of stablecoin supply “is often seen as an indication of new dollar-equivalent liquidity that can easily flow into Bitcoin, Ethereum, or altcoins,” he stated to Cointelegraph. “In this regard, the $300 billion mark appears to be rocket fuel for the next market cycle.”

Santos highlighted stablecoin adoption in nations like Nigeria, Turkey, and Argentina, where residents utilize US dollar-pegged tokens as “de facto dollars” for daily transactions.

Stablecoins are also being incorporated into payment systems by major international financial entities such as Visa, further establishing them within mainstream financial frameworks.

Related: Bitcoin ETFs launch ‘Uptober’ with $3.2B in the second-best week on record

In the past month, Circle minted $8 billion worth of USDC (USDC) solely on the Solana network, with $750 million minted on Thursday, according to blockchain data platform Lookonchain’s X post.

“Capital doesn’t remain idle for long,” noted technical analyst and popular crypto trader Kyle Doops, who anticipates the record stablecoin supply will soon flow into the cryptocurrency market.