Following Donald Trump's victory in the U.S. presidential election, stablecoins have seen a significant rise in market capitalization. A CryptoQuant report reveals that USD-denominated stablecoins have reached a new record high.
Stablecoin Market Cap Growth
According to the report, the total market cap of USD-denominated stablecoins has hit $204 billion, representing a 22 percent increase in the 86 days following Trump's victory. Tether on centralized exchanges has been a major driver of stablecoin liquidity, with the amount growing by 41 percent.
Market Leaders and CryptoQuant Thesis
The report shows that Tether and USD Coin are leading the market growth. 'The expansion of liquidity via stablecoins continues to be driven by Tether's USDT, but Circle's USDC has regained traction.' At the time of the report, Tether's market cap stands at $139 billion, up by $19 billion, while USDC's rose by $17 billion to $52.5 billion.
Impact on Cryptocurrency Market
CryptoQuant analysts believe the booming stablecoin market could signal an impending significant upward movement for Bitcoin and other crypto prices. The liquidity impulse, measured by a 30-day percentage change in market cap, has increased to 20 percent for USDC and shows positive trends for USDT.
The sharp rise in stablecoin market capitalization underscores their critical role in providing liquidity to the crypto market and possibly indicates upcoming shifts in cryptocurrency prices.
