According to (The Block), the total market capitalization of stablecoins has reached a record high of $200 billion, driven by a surge in on-chain lending yields.
Coinbase analysts noted that the growth in stablecoin market capitalization may be due to investors seeking exposure to on-chain lending rates, which surpass those offered by traditional finance.
According to CoinGecko data, the total market capitalization of stablecoins has exceeded $200 billion, reflecting a 13% increase over the past month. Similarly, the total stablecoin supply metric (including the unissued USDT in the Tether treasury) has also exceeded $200 billion, according to (The Block). Analysts point out that this surge comes as investors seek higher yield opportunities on decentralized finance platforms.
According to DeFiLlama data, the sharp increase in stablecoin market capitalization began on November 5, coinciding with Donald Trump's victory in the U.S. presidential election. Coinbase analysts also highlighted that the deposit rates for USDC on Aave have doubled in the past month. They stated, 'The lending rates for stablecoins have surged, with annualized rates reaching 10-20% across almost all deployment networks on Aave and Compound, including Ethereum and Base.' Additionally, the total value locked in lending protocols has reached $54 billion, surpassing the previous bull market peak of $52 billion.
Coinbase analysts David Duong and David Han pointed out that the rise in stablecoin market capitalization indicates that investors are looking to capitalize on the increasing yields offered by DeFi lending protocols. They stated, 'We believe this represents a wave of new capital inflows aimed at taking advantage of lending rates far exceeding long-term bond yields or seeking high Beta trades on-chain.'
In addition to the rise in lending rates, Ethena's yield token sUSDe has seen its annual yield soar to over 24%, significantly up from about 13% in early November. However, DeFiLlama's data predicts that sUSDe's annual yield may drop below 19% next month.
Coinbase analysts also pointed out new opportunities in high-yield assets like HyperLiquid's HYPE token and the newly launched AI agent protocol. They emphasized that these higher yields are only available to on-chain participants, driving investors to interact with these decentralized platforms to take advantage of potential opportunities.
Analysts noted, 'The continued strong performance of Bitcoin and other major cryptocurrencies has driven significant on-chain activity across various sectors, including decentralized exchange (DEX) trading volume, lending activity, and stablecoin growth.'
