$76B Fiat Flood into Crypto Sends Strong Market Signal

The stablecoin market is witnessing a remarkable surge. Billions of fresh capital are potentially setting the stage for increased trading activity and asset appreciation.

USDT and USDC’s combined growth means investors are positioning for further upside across the crypto market.

Billions in Fiat Pour

Tether’s USDT saw its market cap climb from $120 billion before the US election in November 2024, when Donald Trump secured a victory, to the current $165 billion, according to data shared by Matrixport.

During the same period, Circle’s USDC leaped from $34 billion to $65 billion. This $76 billion influx of fiat into crypto through just two stablecoins is indicative of a renewed investor confidence as major political and economic events approach.

The pace of growth, closely following the improving regulatory clarity, points to the early stages of a potentially transformative trend. These inflows strengthen the industry’s liquidity base and position stablecoins as a crucial driver of crypto’s next phase of expansion.

The passage of the GENIUS Act has been crucial in catalyzing this growth trajectory. Signed into law by President Trump on July 18, this legislation represented the first major cryptocurrency regulation passed by Congress. The act aims to establish a clear regulatory framework for payment stablecoins. As a result, many financial companies in the US are gearing up to launch their own dollar-backed crypto tokens.

Circle Goes Public, Tether Won’t

With regulatory frameworks now in place and billions flowing into the sector, major stablecoin players are making bold moves to capitalize.

For instance, the company behind the USDC stablecoin, Circle, has made headlines following its June IPO, which raised approximately $1.2 billion at an offering price of $31 per share. In its first quarterly earnings report as a public company, revenue and reserve income surged 53% year-over-year to $658 million, beating expectations.

Despite a considerable net loss of $482 million driven by IPO-related non-cash charges, Circle’s stock rallied significantly to around $163, which is more than five times its debut price. The company also announced plans to roll out its Arc Layer 1 blockchain later this year to further boost stablecoin utility across payments, capital markets, and FX.

Its rival stablecoin issuer, Tether, on the other hand, has no intention of going public.