The supply of stablecoins has increased by 5 billion dollars after the US elections. Consequently, investors, attracted by potential pro-crypto policies, are accumulating liquidity, marking an annual high of 41 billion on the main exchanges.
Let’s see all the details below.
The stablecoin supply reaches 41 billion dollars, hitting a new annual high
The cryptocurrency market has seen a significant surge in the supply of stablecoins after the recent US elections, suggesting a capital accumulation in preparation for future investments in digital assets.
The expansion of the stablecoin supply, which represents a fundamental source of liquidity for cryptocurrency trading, is considered a bull signal for the sector.
Specifically, during the week following the elections, the two main stablecoins, USDT by Tether and USDC by Circle, recorded a combined growth of over 5 billion dollars.
According to TradingView data, the supply of USDT has increased by 3.8 billion, bringing it to a record of 124 billion dollars.
In parallel, the supply of USDC has seen an increase of 1.6 billion, reaching almost 37 billion dollars. These numbers indicate that investors are pouring money into the cryptocurrency market, likely in anticipation of buying opportunities.
The growth of the stablecoin supply is particularly significant because these assets, whose value is pegged to fiat currencies like the US dollar, are used as “dry powder” to purchase cryptocurrencies.
The accumulation of liquidity through stablecoins highlights the preparation of investors to seize new investment opportunities. Especially in a context where Bitcoin and other cryptocurrencies could benefit from more favorable policies.
The influence of the United States elections
Interest in the crypto market has increased both at the retail and institutional levels before the elections, as explained by David Shuttleworth, partner of Anagram.
Shuttleworth emphasized that, after the publication of the election results, there was pressure on the buying side, with investors starting to deposit capital in stablecoin.
A key metric that reflects this behavior is the balance of stablecoins based on Ethereum on the exchanges. Before the elections, many investors had adopted a cautious approach, reducing their deposits and maintaining a wait-and-see position.
However, immediately after November 5th, the stablecoin balances experienced a surge, reaching an annual high of 41 billion dollars compared to the 36 billion at the beginning of the month, according to on-chain data provided by Nansen.
The increase in the supply of stablecoins has coincided with a surge in Bitcoin (BTC) prices, which has reached new record levels.
The anticipation of a political climate favorable to criptovalute, linked to Donald Trump’s electoral victory and his promises of support for the sector, has triggered a wave of enthusiasm in the market.
The idea that a more crypto-oriented regime could lead to clearer regulations and a more favorable environment for investments has contributed to this trend.
Trump, known for his contradictory positions on the subject, criticized Bitcoin in the past, calling it a “scam” in 2021. However, his campaign for 2024 has promoted a different narrative, suggesting that “cryptocurrencies represent the future”.
This shift has fueled hopes for greater institutional acceptance and policies that can foster innovation in the sector.
Expansion on Solana and TON
In any case, the activity in the stablecoin sector was not limited to Ethereum. The supply of USDC on the Solana (SOL) blockchain grew by 14% in one week, reaching nearly 2.9 billion dollars, according to DefiLlama.
This increase was accompanied by a recovery in transaction volumes and Solana network revenues. Indicating therefore a renewed confidence in decentralized finance protocols (DeFi) based on this blockchain.
In the same way, the supply of USDT on the TON blockchain has reached a new record of 1.1 billion dollars, with an increase of 10% in the same period.
The TON blockchain, centered around the messaging app Telegram, continues to gain popularity, attracting users interested in experimenting with its innovative capabilities.
In other words, the expansion of the stablecoin supply and the frenetic activity observed in the cryptocurrency ecosystem demonstrate that the market is in full swing.
Investors are positioning themselves to take advantage of any market movements, fueled by expectations of a brighter future for cryptocurrencies under a more friendly administration.
This dynamic reflects a market that evolves rapidly and adapts to political and regulatory changes.
While it remains to be seen how the new policies will actually affect the sector, the growing interest and accumulation of capital in stablecoins are clear signals that the confidence in the potential of cryptocurrencies remains high.
As 2024 progresses, the cryptocurrency market is preparing to experience new developments, and investors seem ready to seize the opportunities.
