Bitcoin’s (BTC) surge to record highs has boosted the overall crypto market, leading to strong bullish sentiment for the future. During this time, there has been a significant increase in Tether (USDT) inflows to exchanges, aligning with the ongoing crypto bull rally. According to Santiment, there has been an average net inflow of approximately $40 million per day USDT to cryptocurrency exchanges over the past eight weeks.
These inflows have been crucial in fueling many historic crypto price pumps, contributing to positive sentiment and liquidity in the market. As 2024 comes to an end, the continuation of this stablecoin “dry powder” influx suggests potential for further upward momentum as traders allocate funds towards cryptocurrencies.
The stablecoin market has matured globally, even overtaking Bitcoin as a preferred asset for everyday transactions, according to Chainalysis’ report. Despite several players in the market, USDT has emerged as the undisputed heavyweight this year, with its supply increasing by 50 billion over 12 months.
USDT now controls 66% of the $212 billion stablecoin market and has maintained the top spot in trading volumes throughout 2024. A recent report by Standard Chartered and Zodia Markets predicts that stablecoins could potentially grow from 1% to 10% of the US M2 money supply and foreign exchange (FX) transactions.
The two companies believe that the utility of stablecoins has expanded beyond cryptocurrency trading to cross-border payments, payroll, trade settlements, and remittances. The report highlights that stablecoins could address inefficiencies in traditional financial systems, offering faster and cheaper transactions.
Regulatory clarity, particularly from a possible Trump administration in 2025, is seen as a key factor to unlocking their full potential. Adoption in emerging markets like Brazil and Nigeria is already rising, driving further demand.
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