The growth of stablecoins means more liquidity to buy bitcoin and cryptocurrencies.
“This will probably be one of the main drivers in a bull market,” says analyst.
The market capitalization of USD Tether (USDT) and other stablecoins has been increasing steadily for just over a year. And not only that, but it is reaching outstanding levels. This is highly relevant for bitcoin (BTC) and volatile cryptocurrencies to reactivate their bullish trend.
Specifically, the total capitalization of stablecoins has risen 36% in the last twelve months. Currently, this is more than 165 billion dollars (USD), which reflects the amount of money circulating in these assets.
For Alice Liu, senior researcher at data provider CoinMarketCap, investors They should see this as a huge reserve of cash ready to be deployed in the cryptocurrency market the moment bitcoin rises again.
The explanation behind this is that many investors They maintain stablecoins to buy volatile cryptocurrencies like bitcoin as soon as there is greater clarity of an upward trend. This is because these assets allow them to be free of the possible downward volatility of the market.
“Many people want to keep money in cash, both cryptocurrency users and institutions,” commented Liu. “It’s almost similar to Warren Buffett having cash on the side, waiting to buy at any moment,” he compared to put it in perspective.
Stablecoins are cryptoassets that maintain the same price as a fiat currency, mostly the US dollar (USD). The one with the largest capitalization is tether (USDT), which triples that of USD Coin (USDC), which is the next largest, as seen below.
Stablecoins are approaching their all-time capitalization maximum
The current capitalization of stablecoins is approaching its all-time highwhich was just over USD 180,000 million in 2022, as the following graph shows. However, something interesting here is that the bitcoin and cryptocurrency market is in an extremely different period than at that time.

At that time, the bearish cycle of bitcoin began, as a result of the strong profit-taking of the bullish rally of 2021. However, currently, this asset is in a bull market that perceives a stage of consolidation after the all-time high price it marked ago. seven months. This can be seen below.
This means that, Unlike the previous bull cycle, there is now more stablecoin liquidity available to get into bitcoin and volatile cryptocurrencies. Therefore, this is likely to translate into a source of extra money to boost prices.
Of course, it should be taken into account that stablecoins are also used for other purposes, such as depositing in DeFi protocols to obtain returns. Therefore, not everything will work out by switching to volatile cryptocurrencies. However, its current level of capitalization demonstrates ample liquidity to pump prices.
“This is going to be one of the main drivers in an upward cycle”
For the CoinMarketCap researcher, this panorama reflects that, if cryptocurrency prices begin to rise again, stablecoins will add fuel to the fire. “This is probably going to be one of the main drivers for us in a bull market,” said the specialist.
Taking this into account, it is necessary to know not only the capitalization of stablecoins, but also where these assets are located. For example, reserves on exchanges are indicators of those who can possibly enter the bitcoin and cryptocurrency market, since they are trading platforms.
Over the last year, the reserve of stablecoins on exchanges has increased by 20%, which strengthens optimism. Historically, the growth of this metric has preceded bullish trends in the bitcoin market, so it works as an indicator for prices.
Meanwhile, bitcoin is trading near $68,000. As CriptoNoticias reported, its price has maintained an upward trend for two monthswhich reversed the corrective streak that it maintained in the previous five months. In this way, it is trading at 10% of the historical maximum it registered seven months ago, showing greater strength.