The stablecoin market capitalization has hit a record $300 billion, indicating increased on-chain investor activity, which could serve as “rocket fuel” for cryptocurrency valuations, analysts suggest.
As of Friday, the total supply of stablecoins has surpassed $300 billion, showing a 46.8% growth rate year-to-date, potentially exceeding last year’s market expansion, as reported by Cointelegraph.
This landmark achievement coincides with the beginning of October, traditionally the second-best month for Bitcoin (BTC), boosting investor enthusiasm for a possible rally dubbed “Uptober.”
According to Andrei Grachev, founding partner at Falcon Finance, a synthetic dollar protocol, “While the stablecoin supply has crossed 300 billion dollars, it’s not just idle capital. It is actively circulating in the markets.”
Grachev further explained to Cointelegraph, “The transfer volumes amount to trillions each month. The velocity metrics indicate ongoing activity across networks. This capital is actively utilized, not just held.”
“Stablecoins are facilitating trades, funding positions, and providing dollar access where traditional banks fall short,” he added.
Beyond investment, stablecoins serve various functions, including payments, remittances, merchant transactions, and saving methods. An increasing supply may also reflect greater usage for everyday transactions or institutional agreements.
Related: Wall Street’s next crypto play may be IPO-ready crypto firms, not altcoins
$300 billion stablecoin supply may be “rocket fuel” for crypto
The achievement of $300 billion may indicate a “rebound in digital assets” alongside the enhanced integration of stablecoins within global finance, according to Ricardo Santos, CTO at the fintech payment company Mansa Finance.
He explained that the growth in stablecoin supply often signals fresh dollar-equivalent liquidity that can quickly flow into Bitcoin, Ethereum, or other altcoins. “Thus, the $300 billion mark appears to act as rocket fuel for the upcoming market cycle,” Santos stated.
He noted stablecoin adoption in countries like Nigeria, Turkey, and Argentina, where residents utilize US dollar-pegged tokens as “de facto dollars” for daily transactions.
Global financial entities such as Visa are also incorporating stablecoins into payment systems, further embedding them into conventional financial frameworks.
Related: Bitcoin ETFs kickstart ‘Uptober’ with $3.2B in second-best week on record
In the past month, Circle has minted $8 billion in USDC on the Solana network, with $750 million minted just on Thursday, according to data from blockchain platform Lookonchain’s X post.
“Capital never remains idle for long,” according to technical analyst and crypto trader Kyle Doops, who anticipates the record stablecoin supply will soon flow into the cryptocurrency market.
Magazine: Crypto aimed to overthrow banks, now it’s becoming them in stablecoin conflict
