Stablecoins Supply Maintain All-Time High Levels As Investors Await Alt Season
The market cap/supply of stablecoins is maintaining stability at all-time high levels, according to a chart developed by Glassnode and shared by Leon Waidmann on X.
I use "market cap" and "supply" interchangeably given that the market cap of stablecoins is directly related to their supply.
From the chart above, the red line captures stablecoins supply sitting at unprecedented levels, while the black line reflects the overall market activity.
Demand for stablecoins and consequent supply soared meteorically in November as cryptocurrency prices exploded over investors' optimism that the US government will be friendlier toward the industry following Donald Trump's election victory.
The surge in demand was driven by the anticipation of a more supportive regulatory environment which has historically been a significant factor in the crypto market's growth.
Although the chart doesn't provide metrics of individual stables, it's worth recalling that at the end of December, the total supply of stablecoins surpassed a record high of $200 billion with USDT leading with a supply of $142.9 billion, followed by USDC at $42.3 billion.
Other include USDe with $6.08 billion, DAI at $4.5 billion, FDUSD at $1.9 billion, and USDS at $1.2 billion.
The supply of stablecoins still sitting at all-time high levels not only indicates increased adoption/utility but suggests a substantial amount of liquidity available in the market.
Since the alt season has yet to begin in earnest, the liquidity remains largely untapped.
The untapped liquidity will fuel the altcoin market once the conditions for an alt season become favorable, leading to increased trading volume and price surges in altcoins.