Could They Fuel a Sustained Crypto Rally?

Market experts have consistently emphasized that cryptocurrencies require increasing liquidity to sustain a prolonged rally. As it stands, the crypto market could be on the brink of an explosion due to the kind of growth being recorded in the stablecoin sector.

The latest weekly report from the market research platform CryptoQuant has revealed that the market capitalization of stablecoins is expanding and has reached unprecedented highs. This indicates that liquidity is growing in the crypto market, and there is more capital waiting to be deployed.

Market Sees Rise in Liquidity

According to CryptoQuant, the stablecoin market cap has grown 17% year-to-date (YTD), increasing by $33 billion to a record $228 billion. Analysts say this growth has been supported by the wider adoption of stablecoins for payments and transfers, increased crypto trading activity, and improved regulatory clarity in the United States, thanks to the Trump administration.

Tether’s USDT and Circle’s USD Coin (USDC) have been driving the growth in the stablecoin market cap. Since the beginning of the year, USDT has grown its market cap by 13% to $155 billion, adding $18 billion.

Within the same timeframe, USDC has significantly recovered from the hit it suffered in March 2023, following the collapse of Silicon Valley Bank (SVB) during the U.S. banking crisis. At the time, USDC depegged from $1, and its market cap fell as low as $24 billion before the end of that year. So far in 2025, the market cap of USDC has increased by 39% to $61 billion, representing an increase of $17 billion.

Staked Stablecoins Record Growth

Furthermore, CryptoQuant found that the amount of stablecoins on centralized exchanges (CEXs) has rallied to record-high levels. The value of ERC20 stablecoins on CEXs has reached approximately $50 billion. Analysts attributed most of this growth to USDC, which has seen its exchange reserves increase by 1.6x to roughly $8 billion so far in 2025.

Besides the growth seen in USDC, CryptoQuant also noted that the value of yield-bearing stablecoins, which are also staked assets, has recovered and reached a level not seen since late March.

Since they plunged to a local low on May 23, the total value of yield-bearing stablecoins has risen 28% to $6.9 billion.

“This recovery was driven by sUSDe, which increased by $1.23 billion, and sUSDs, which gained 35%—or $0.7 billion—in market cap over the same period,” CryptoQuant analysts added.