Stablecoin Market Cap Hits $140B, Highest Since 2022 Amid USDC Resurgence, Tether Growth

Stablecoin supply is a "thermometer" for money flows entering the crypto market, one analyst noted.

AccessTimeIconFeb 26, 2024 at 10:36 p.m. UTC
Updated Mar 8, 2024 at 10:12 p.m. UTC
  • The total stablecoin market value climbed to nearly $140 billion for the first time since late 2022.
  • Circle's USDC added over $2.5 billion to its market cap over the past month, outpacing Tether's growth during the same period.

The stablecoin market's expansion is accelerating this year as fresh money continues to enter into the digital asset market, fueling the crypto rally.

The total market capitalization of stablecoins recently climbed past $140 billion in February, according to CoinMarketCap. This is the highest level since December 2022, DefiLlama data shows.

Stablecoins are tokenized versions of cash, bridging traditional (fiat) money and blockchain-based markets and providing market participants with liquidity for trading and lending. They thus serve a key role for digital asset markets, making the growing market cap an important milestone for the broader crypto market.

"Changes in stablecoin supply are a thermometer for whether money flows in or out of the crypto ecosystem," Vetle Lunde, senior analyst at K33 Research, said in a market report Friday.

The stablecoin market started expanding rapidly in early November ending a brutal 18-month downtrend. Since then, the market cap has expanded by 12% or about $15 billion, Lunde noted, with about $10 billion of that growth happening since the beginning of the year.

USDC resurgence

Tether's USDT, the largest stablecoin on the market, extended its growth to a new all-time high of $98 billion, adding roughly $2 billion over the past month, CoinGecko data shows.

While the stablecoin growth late last year was predominantly led by USDT, the expansion this year is broader-based.

Second-largest stablecoin USDC, issued by Circle and backed by crypto exchange Coinbase, experienced a resurgence, growing to over $28.5 billion from $24 billion since the start of the year, per CoinGecko. It added nearly $2.5 billion over the past month, outpacing Tether's growth during the same period.

David Shuttleworth, research partner at Anagram, noted that USDC supply grew nearly 10% over the past month and was responsible for more than half of the total stablecoin growth.

"More liquidity and more users are steadily entering the space, and USDC is gradually reclaiming market share," Shuttleworth said in an X post.

One catalyst for USDC's resurgence might be that bitcoin's rally this year was led by strong U.S. investor demand, where USDC is more popular among traders. Meanwhile, USDT is dominant in Asia, Africa and Latin America for traders on off-shore exchanges such as Binance.

The growth also coincided with Binance relisting several USDC trading pairs late last year and the launch of spot bitcoin ETFs in the U.S., with many of those funds using Coinbase for BTC settlements, a Monday market report by Coinbase noted.

USDC market share of trading volumes on centralized crypto exchanges (Coinbase)
USDC market share of trading volumes on centralized crypto exchanges (Coinbase)

The report added that USDC is gaining a bigger presence – albeit still middling – outside of U.S. markets, with its market share in derivative and spot trading settlement on global centralized exchanges rising to nearly 4% from below 1% in mid-2023.

Edited by Stephen Alpher.


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Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.