- The crypto market is stabilizing, led by a surge in USDT and USDC.
- Key players in the crypto world are expanding their operations.
- The stablecoin surge mirrors a pattern before a historic crypto bull run.
The cryptocurrency market has shown signs of life following a sharp downturn earlier this month, with two of the largest stablecoins, USDT and USDC, experiencing significant growth in their supply. These stablecoins have seen a surge of nearly $3 billion in the past week, a clear indicator of renewed investor interest.
USDT and USDC Dominate Post-Crash Market
Tether, the issuer of USDT, has been particularly active, transferring over $1.3 billion of the stablecoin to exchanges and market makers since the market crash on August 5. This influx has propelled USDTโs market capitalization to a new all-time high, surpassing $115 billion.
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Circle, the company behind USDC, has also witnessed substantial activity. The firm issued approximately 3.9 billion USDC while redeeming 2.3 billion over the past week, resulting in a net increase of roughly $1.6 billion. With this growth, the total USDC in circulation now stands at $34.5 billion, backed by a reserve of $34.6 billion.
Of this reserve, $4.5 billion is held in cash, while the remaining $30.1 billion is invested in the Circle Reserve Fund. The surge in USDC supply has contributed to a market capitalization increase of $1.6 billion this week alone, reaching its highest point since March 2023.
Binance, a major cryptocurrency exchange, has also seen substantial inflows of USDT and USDC, with deposits exceeding $1.5 billion and $820 million in the four days following the market crash.
USDT and USDC Mirrors Last Year Trend
The recent growth in USDT and USDC supply mirrors a similar trend observed between November and March last year when a cryptocurrency bull run propelled Bitcoin’s price to a record high of over $73,750. While the expansion of these stablecoin supplies had temporarily plateaued, the latest surge suggests a renewed bullish sentiment among investors.
Tether Holdings is capitalizing on this growth by expanding its workforce. The company plans to increase its headcount to 200 by mid-2025, primarily focusing on hiring talent in compliance and finance. Tether CEO Paolo Ardoino has emphasized the company’s commitment to maintaining a lean structure while ensuring flexibility to adapt to market conditions.
On the Flipside
- The surge in USDT and USDC supply might signal growing investor caution, as stablecoins are often used as safe havens during periods of market volatility.
- The correlation between stablecoin growth and past market trends does not guarantee future price increases in cryptocurrencies.
Why This Matters
The current surge in USDT and USDC supplies is noteworthy because it mirrors a historical pattern where increased stablecoin issuance often preceded significant changes in the cryptocurrency market, including periods of volatility.
To learn more about Tether’s latest minting and its potential market impact, read here:
Tether Minted $1 Billion on Tron, Does It Signal a Bull Run?
For insights on the recent discussions between major crypto firms and VP Harris, read here:
Ripple, Coinbase & Circle to Meet with VP Harris on Crypto โResetโ
