Record $300B stablecoin liquidity ready to fund Bitcoin and Ethereum purchases

The stablecoin market has crossed a landmark $300 billion capitalization, reflecting its growing role as the connective tissue between traditional finance and the crypto ecosystem.

This milestone reflects heightened investor demand and the diversification of stablecoin models, which range from fiat-backed giants to yield-bearing challengers.

Tether’s USDT continues to dominate with a market share of more than half, valued at $176 billion. Circle’s USDC follows at $74 billion, while Ethena’s USDe has emerged as the fastest-growing entrant, capturing $14.8 billion and signaling appetite for yield-generating alternatives.

Other notable issuers include Sky and WLFI, which have positioned themselves as increasingly competitive second-tier rivals to established ones.

Ethereum remains the primary home for stablecoins, hosting nearly $177 billion in natively minted assets. Tron ranks second with $76.9 billion, while Solana and Arbitrum hold $13.7 billion and $9.6 billion, respectively.

Meanwhile, stablecoins’ rapid growth this year has prompted major institutions to update their outlooks about the industry. A Coinbase forecast suggests stablecoins could reach a market capitalization near $1.2 trillion by 2028.

According to the firm, the projection is based on incremental adoption supported by favorable regulation and broader acceptance of tokenized assets.

What is the effect on Bitcoin and Ethereum?

A 2021 study found that the creation of new stablecoins contributes to price discovery and greater efficiency in crypto markets.

For instance, Tether’s issuance tends to drive higher trading volumes without directly altering Bitcoin or Ethereum returns. Interestingly, Bitcoin price declines are often met with increased Tether activity, reinforcing its role as a temporary safe haven.

Meanwhile, the same research identified that issuances are linked to arbitrage opportunities, allowing traders to profit when market prices deviate from parity.

At the same time, a new surge in stablecoins signals a wave of returning capital into digital assets, strengthening liquidity across the board. For Bitcoin, inflows create demand that indirectly sustains its role as the industry’s reserve asset.

The 2021 study indicated that large Bitcoin purchases often follow stablecoin issuances, suggesting a feedback loop in which liquidity inflows stabilize the market.

The report stated:

“Demand for stablecoins is driven by demand for cryptocurrencies – be it regular investments or arbitrage opportunities – and/or the market regards the issuance of stablecoins as a positive signal regarding the demand for cryptocurrency.”

Ethereum, meanwhile, has benefitted from the structural demand generated by tokenized assets. Data from Token Terminal shows that tokenized holdings, including stablecoins, form a durable floor for Ethereum’s valuation.

Even in downturns like 2022, the value of tokenized assets on-chain remained steady, preventing Ethereum’s fully diluted market cap from collapsing further.

So, as more real-world assets migrate to blockchain networks, this floor expands, ensuring Ethereum’s long-term resilience despite price volatility.

In effect, the stablecoin boom is not an isolated story. It is accelerating capital efficiency, deepening crypto’s ties with mainstream finance, and reinforcing the foundations of both Bitcoin and Ethereum.

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