Bull Market Floodgates Open: Stablecoins Expand by $7 Billion in Two Weeks, USDT Reaches Record High Market Cap
Stablecoins — A Catalyst for Bull Market
The increasing market cap of stablecoins like USDT mirrors the expansion of money supply in traditional finance. This growth implies a surge in funds flowing into the cryptocurrency market, enhancing liquidity and bolstering chain-specific transaction activities. Essentially, the market cap of stablecoins is a key catalyst in triggering bull market conditions.
Further reading：Forbes’ 2024 Crypto Predictions: USDT’s Fate Hangs in Balance, Enhanced Accounting Standards, and Bitcoin’s Rise
Tether’s Recent $1 Billion USDT Minting
Tether, the leading stablecoin issuer, added 1 billion USDT tokens to the Tron network on January 5th, as reported by @whale_alert. This move is part of a pre-authorized yet unissued transaction, serving as inventory for future issuance requests and on-chain exchanges. This follows a similar $1 billion USDT minting on the Ethereum network on December 25th of the previous year.
Further reading：Tether’s $1 Billion USDT Issuance on Ethereum: Signaling a Bull Market for DeFi?
Record Market Cap Achieved
Currently, the overall market cap of stablecoins stands at $132 billion, a $7 billion increase in just two weeks. Tether (USDT) dominates this market with a 70.24% share, amounting to $93 billion, marking a historical high.
Ripple Effect on DeFi Protocols and Total Value Locked
With stablecoins leading the charge, the total value locked (TVL) in DeFi protocols across various chains has also seen a significant increase. As per DefiLlama, the TVL in DeFi dropped to around $36 billion in mid-October, a steep decline from the November 2021 peak of $178 billion (an 80% drop). However, with the recent influx of stablecoins, the TVL has rebounded to $52.9 billion, a 50% increase since mid-October.
Impact on Coin Prices and Emerging Protocols
The infusion of substantial funds is gradually reflected in the prices of various cryptocurrencies. For instance, Celestia (TIA), a modular blockchain infrastructure, has seen a 33% increase over the past week and a 21.6% rise in the last 24 hours. Similarly, the decentralized exchange token 1inch has experienced a 12.7% hike in the same timeframe.
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Keywords: Bull Market, Stablecoins, USDT Market Cap, Tether, Cryptocurrency, Liquidity, DeFi, Total Value Locked, Celestia, 1inch, Blockchain
