While Bitcoin struggles to break above its all-time high and altcoins face difficulty finding solid support, one corner of the crypto market continues to expand: stablecoins. Since the beginning of the bull run, the stablecoin market has shown consistent growth, cementing its reputation as one of crypto’s most reliable and scalable use cases. Unlike volatile assets, stablecoins offer stability, liquidity, and utility across DeFi, trading, and settlement.
Top analyst Darkfost recently shared fresh data and highlighted a key development many have overlooked — the total supply of ERC-20 stablecoins is rising again. As of today, it has reached a new all-time high of $121 billion. This milestone signals renewed demand and liquidity entering the crypto ecosystem, at a time when other sectors appear stagnant.
The rise in stablecoin supply underscores the sector’s resilience and importance. While speculative tokens face resistance, stablecoins thrive on utility and adoption. Whether for hedging, yield strategies, or capital movement, their role in crypto remains foundational. As the broader market waits for its next move, the silent growth in stablecoin supply could be an early signal of renewed momentum across the board. The stablecoin narrative is far from over — in fact, it may just be starting.
Stablecoin Growth Accelerates: On-Chain Data Points To Renewed Liquidity
Stablecoins have emerged as one of the most impactful innovations in crypto, creating a vital bridge between traditional finance (TradFi) and decentralized finance (DeFi). This narrative gained massive traction in June when Circle (NASDAQ: CRCL), the company behind USDC, went public on the New York Stock Exchange. Initially priced at $31 per share, Circle’s IPO exceeded all expectations — closing the day at $82.84, marking a 167% gain. Today, CRCL trades nearly six times above its IPO price, giving the company a $42 billion market cap and reinforcing confidence in the stablecoin business model.
On-chain insights shared by Darkfost add another layer to the story. According to the data, the total supply of ERC-20 stablecoins has started rising again and just hit a new all-time high of $121 billion. ERC-20 stablecoins are cryptocurrencies built on the Ethereum blockchain that follow the ERC-20 token standard. They are designed to maintain a stable value, usually pegged to fiat currencies like the US dollar (e.g., USDC, USDT, DAI).
This surge in supply is critical because stablecoins are minted on demand — their issuance directly reflects user demand and fresh liquidity entering the system.
This expanding supply meets the needs of protocols and exchanges that face rising user activity and capital inflows. While market sentiment remains cautious, if the stablecoin supply continues to grow, it would signal renewed risk appetite and capital deployment. In that case, stablecoins may once again serve as the early catalyst for the next major phase in the crypto bull cycle.
Dominance Hovers Below 8%: A Neutral Yet Strategic Positioning
The weekly chart shows stablecoin dominance currently sitting at 7.90%, a level that reflects cautious but sustained interest in liquidity reserves across the crypto market. After a sharp climb between 2020 and mid-2022—when stablecoin dominance peaked above 16% during risk-off periods—dominance has gradually declined, aligning with risk-on rotations into Bitcoin and altcoins during bull runs.
However, since early 2024, dominance has consolidated between 7% and 10%, signaling a more balanced environment. The current level remains just above the 50-week and 100-week moving averages (7.76% and 8.02%, respectively), suggesting strong horizontal support. Meanwhile, the 200-week moving average at 9.30% acts as a long-term ceiling.
This neutral position implies that market participants are neither fully risk-on nor risk-off. If dominance rises from here, it could either reflect increased fear (capital flowing out of volatile assets) or fresh liquidity entering the market, especially if paired with a rise in stablecoin supply, which we’re already witnessing with ERC-20 tokens.
Featured image from Dall-E, chart from TradingView
