Stablecoin market capitalization on the rise…recovering pre-Terra incident levels

The market capitalization of stablecoins, which are used as legal tender such as the U.S. dollar in the cryptocurrency market, has recently shown an upward trend and has recovered to the level before the Terra incident.
The increase in the market capitalization of stablecoins, which have various uses such as remittance, trading, and decentralized finance (DeFi), means that "new inflows" and "market expansion" are expected to occur.
In response to this, the virtual currency market is expected to see a stable liquidity increase, which is considered a representative liquidity indicator for the market, in line with the timing of the Federal Reserve's base interest rate cut in the second half of the year.
It seems that they are expecting the market to boom due to the increase in the coin's market capitalization. According to data from Cryptoquant on August 31, the total market capitalization of stable coins was 165,000 as of the 30th of last month.
The total market capitalization of stable coins has exceeded $164 billion (approximately 26.52 trillion yen) for the first time in two years and two months, after exceeding $160 billion (approximately 23.30 trillion yen) last month.
The total has been increasing steadily recently, surpassing the 26.5372 trillion yen mark. Cryptoquant analyst Julio Morenosik said, "Many people are using the Global M2 (global
"I'm paying attention to the stablecoin market capitalization, but I'm keeping a close eye on the stablecoin market capitalization," he said, "The stablecoin market capitalization has exceeded $165 billion (approximately 26.523 trillion yen), which is a reflection of the market liquidity.
"This means that the market cap of all stablecoins, excluding algorithmic stablecoins, has reached an all-time high," explained Patrick Scott, a cryptocurrency analyst.
"This is higher than at the start of 2022, and new funds are flowing into the crypto-asset market."
As their analysis suggests, the market capitalization of a stablecoin is generally not a good indicator of liquidity.
It is also used as an auxiliary indicator for the purpose of purchasing virtual currencies and investing in DeFi. The market capitalization of stable coins, which are used to purchase virtual currencies and to invest in DeFi, is increasing along with the overall market capitalization of virtual currencies.
If the government were to take action, it would be interpreted as an injection of funds to "increase liquidity." For this reason, the industry believes that an inflow of new funds is essential to break out of the "bearish market" that has continued until recently.
Normally, if the market capitalization of stable coins increases and the trading volume of virtual currencies also increases, it means that funds are flowing smoothly in the market to a certain extent.
This is because if the market rises, it will show an overall improved liquidity indicator than before. In fact, last month, crypto asset trading volume on centralized exchanges (CEXs) increased 19% from the previous month to $4.94 trillion (approximately
The volume of derivatives trading also increased by 21% from the previous month to $3.5 trillion (approximately JPY 511.17 trillion), showing an improvement from previous months.
Earlier, Binance Research said in an independent report that the market has seen a significant slowdown in the inflow of new funds and has entered a virtual zero-sum (PvP) battle between traders competing for set profits.
) game is being played," and "Markets without new inflows will end up competing with each other," he said, expressing concern over the lack of liquidity in the market.
However, it is analyzed that the inflow of new funds into the cryptocurrency market has increased recently, and the overall market indicators for cryptocurrencies have improved.