The Stablecoin Market Keeps Expanding, Reaching $162.1B Following a $4.7B Rise in August

The stablecoin supply is at $162.1 billion following a $4.7 billion rise in August, which represents a 3% monthly growth, Artemis' data reveals.

Key Takeaways

The total stablecoin supply now stands at $162.1 billion, following a $4.7 billion rise in August, which marks a 3% monthly growth, Artemis’ data reveals.

This movement highlights several trends in the market, including institutional adoption, the search for stability and liquidity, and growth in confidence.

Interestingly, the growth in stablecoin supply occurred in the same month when Bitcoin (BTC) retraced nearly 9%, followed by the broader crypto market.

Tether USD (USDT) continues to dominate the market with a $119 billion market cap, a significant lead against USD Coin’s (USDC) $33.5 billion supply, which is the second-largest stablecoin issuer.

Sky’s stablecoin DAI comes in third, with market participation of $5.3 billion.

Seeking Solid Ground

This disparity reflects a shift in investor behavior, who are now swapping their holdings for a more stable and liquid alternative, Anastasija Plotnikova, CEO & co-founder of Fideum, told Crypto Briefing.

“While this trend can bolster the overall health of the crypto market by providing a safe haven for assets, it also raises critical questions about their long-term stability. The ongoing evolution of stablecoins will likely play a crucial role in shaping the future landscape of the cryptocurrency market,” she added.

Elaborating on the long-term stability, Plotnikova mentions the European Union (EU) regulatory framework Markets in Crypto-Assets Regulation (MiCA), which imposes new rules for stablecoins, adding layers of compliance and oversight.

Although the results of these regulatory changes in the EU are yet to be seen, Fideum’s CEO believes that stablecoins will continue to be essential for facilitating international low-cost transactions, and driving demand and adoption in the crypto ecosystem.

Institutional Adoption Gauge

The rising stablecoin supply amid crypto prices’ drawdown can be also seen as a gauge for institutional interest, according to Philipp Zentner, CEO of LI.FI. He explained usually onboard into crypto through stablecoins to avoid volatility risks.