Stablecoins Hit Crazy ATH in Major Metric, What's Next?

U.S. Dollar Tether (USDT) supply on major centralized exchanges is rocketing since the bull rally started in early November. Normally, this might be an indicator for the next phase of crypto prices upsurge approaching, CryptoQuant experts say. Meanwhile, the rivalry in the stablecoin segment intensifies.

$43 billion USDT deposited to exchanges, CryptoQuant indicates bullish signal

U.S. Dollar Tether (USDT), the largest USD-pegged stablecoin, hit a new record in deposits on centralized exchanges. Since the U.S. presidential elections, traders deposited $12.5 billion in USDT on CEXes, major on-chain analytical firm CryptoQuant says.

Due to this massive USDT liquidity inflow, the net volume of the stablecoin on exchanges surged by 43% in less than three months to hit an all-time high at $43 billion.

During the same period, the net capitalization of the stablecoin segment surged from $167 billion to $204 billion, as per CryptoQuant's data. This metric is also on record-breaking levels after a 22.1% upsurge in November-January.

As stablecoin liquidity can only be used for purchasing Bitcoin (BTC) and altcoins, such concentration of stablecoins on CEXes might hint at the next leg of the BTC rally being around the corner.

To provide context, during the most painful phase of the 2021-2022 crypto recession post-FTX/Alameda collapse, the net volume of stablecoins on centralized exchanges touched $18 billion. The total stablecoin segment market cap was sitting at $140 billion back then, almost 30% lower compared to current values.

USDC supply rocketing, challenges USDT dominance

The stablecoin segment remains quite centralized with USDT dominance protecting the 66% level. However, the largest stablecoin is being challenged by key rival USDC by Circle.

As covered by U.Today previously, CryptoQuant called USDC the fastest-growing stablecoin of recent months. The asset cap surged from $35 billion to over $52 billion in three months.

The position of USDT might be threatened by both inception of new regulated stablecoins like Ripple's RLUSD and MiCA-associated delisting for EU customers.

Starting Jan. 31, 2025, USDT is unavailable for all European users of Tier 1 exchange Crypto.com due to the new regulatory framework coming into effect.