Stablecoin exchange balances reached a yearly high of $41 billion this week, providing fresh liquidity for digital asset purchases, according to analysts. This surge in stablecoin supply has been driven by a wave of investment into the crypto market following the U.S. election.
The two leading stablecoins, Tether’s USDT and Circle’s USDC, together saw an increase of more than $5 billion in circulation since Nov. 5, TradingView data shows. USDT tokens grew by $3.8 billion, setting a new record of $124 billion in circulation, while USDC expanded by $1.6 billion, bringing its total supply to nearly $37 billion.
This growth in stablecoin supply is seen as a positive sign for the digital asset market, as it suggests an influx of capital into the crypto ecosystem. Stablecoins are pegged to external assets like the U.S. dollar, offering stability and liquidity. They are widely used for trading, providing “dry powder” for buying assets on exchanges. USDT is the most traded stablecoin on offshore exchanges, while USDC is primarily used on U.S.-focused platforms like Coinbase and in decentralized finance (DeFi) applications.
David Shuttleworth, a partner at Anagram, told CoinDesk that there was significant pent-up demand from both retail and institutional investors leading up to the election. Once the results were in, liquidity and buying pressure began to intensify.
One key indicator of this trend is the balance of Ethereum-based stablecoins on exchanges. According to Shuttleworth, stablecoin balances steadily declined ahead of the election as investors adopted a cautious “wait-and-see” approach. However, after the Nov. 5 election, exchange balances surged to $41 billion, a yearly high, up from around $36 billion earlier in the month, according to Nansen’s on-chain data. This increase reflects the influx of stablecoins from investors eager to capitalize on crypto market opportunities.
The rise in stablecoin supply coincided with a spike in activity across various sectors of the digital asset space. Bitcoin hit new record highs following the election results, while expectations of a crypto-friendly administration fueled optimism.
The USDC supply on the Solana network also saw significant growth, rising 14% in the past week to nearly $2.9 billion, driven by a resurgence in DeFi activity and higher transaction volumes. Meanwhile, USDT on the TON blockchain hit a new record of $1.1 billion, a 10% increase, as users continued to explore the emerging ecosystem centered around the Telegram messaging app.
