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Rise in stablecoins could spark a Bitcoin rally

According to CryptoQuant's Julia Moreno, the sizable growth in stablecoins' market capitalization in recent months could help drive a new uptrend in Bitcoin and other cryptocurrencies.

By Mike Hesp
• 2 min read
Rise in stablecoins could spark a Bitcoin rally

According to Julia Moreno of CryptoQuant, the substantial growth in stablecoins' market capitalization over the past months could contribute to a new uptrend in Bitcoin and other cryptocurrencies.

“Stablecoin holdings on crypto exchanges have grown, and USDT reserves on centralized exchanges have also reached a record high of $22.5 billion in 2024,” she told Julio Moreno to TheBlock.

This could give the crypto market the much-needed extra liquidity: “The total market capitalization of stablecoins is positively correlated with higher Bitcoin prices.” USDT from Tether is currently the third-largest cryptocurrency by market capitalization behind Bitcoin and Ethereum, with almost $120 billion. The stablecoin, pegged to the U.S. dollar, has faced repeated criticism, but has proven resilient so far.

Stablecoins now have a total market capitalization of more than USD 173 billion. Almost all top tokens are pegged to the world’s reserve currency, the U.S. dollar. “In September we saw a high correlation between the Bitcoin price and the net inflow of stablecoins on exchanges,” according to a new CryptoQuant quicktake from last Monday.

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