The market capitalization of stablecoins surpassed $140 billion in February.
The stablecoin market began significantly increasing in early November.
This year, new capital is flooding into the crypto market, driving optimism and speeding up the growth of the stablecoin sector. According to CoinMarketCap, the entire market capitalization of stablecoins surpassed $140 billion in February. According to DefiLlama, this is the most amount seen since December 2022.
Stablecoins are digital tokens that function similarly to cash. They connect the dots between blockchain-based markets and conventional fiat money, making trading and lending more liquid for market participants. Their increasing market capitalization is a significant step forward for the cryptocurrency industry as a whole because of the vital role they play in digital asset marketplaces.
Vetle Lunde, senior analyst at K33 Research, said in a market report stated:
“Changes in stablecoin supply are a thermometer for whether money flows in or out of the crypto ecosystem.”
USDC Shines
After a terrible 18-month slump, the stablecoin market began significantly increasing in early November. Lunde pointed out that the market value has grown by 12%, or over $15 billion, since then, with around $10 billion of the increase occurring since the start of the year.
CoinGecko data reveals that the biggest stablecoin, USDT by Tether, reached a new all-time high of $98 billion, an increase of almost $2 billion in the last month. This year’s increase in stablecoins is more diverse than previous year’s, when USDT was the top stablecoin.
According to CoinGecko, the second-largest stablecoin, USDC, which is produced by Circle and supported by crypto exchange Coinbase, saw a significant increase in value, rising from $24 billion at the beginning of the year to over $28.5 billion. Its monthly growth rate of roughly $2.5 billion was higher than Tether’s growth rate of the same time.