Tether and rival stablecoin USD Coin are reaching record levels of circulation, amid the burgeoning crypto market.
As of November 7, the total amount of Tether in circulation reached $72.18 billion, breaching the $70 billion threshold, according to data from glassnode. Meanwhile, USD Coin also exceeded that threshold with its latest printing of $1 billion USDC, bringing the total circulation to $ $74.35 billion.
Historically, big price movements have accompanied larger stablecoin issuance, which have typically implied more demand for funding larger cryptocurrencies. However, others believe the new stablecoins are being introduced in an effort to prop up the market. This is particularly the case for Tether, which has had issues proving it has the deposits to match the increased circulation. Earlier this year, Tether reached a settlement with the NY State Attorney General regarding discrepancies with its dollar deposit amounts.
Crypto market highs
At this point however, one could be forgiven for associating increased stablecoin circulation with higher crypto demand as total market capitalization passed $3 trillion. Bitcoin gained 6.4% in the past day, rising as high as $66,500, nearly approaching its recently achieved all-time high of $67,000.
Ethereum also saw a bump of nearly 3%, continuing its recent surge and achieving another all-time high of $4,768. Additionally, Ethereum’s hash rate also reached an all-time high of 1,014,230,266,415,220, according to glassnode data. Meanwhile, in third and fourth place Binance Coin and Solana are up over 20% in the past week.
According to analyst at broker IG Markets Kyle Rodda, falling real yields, and inflation expectations have added to the appeal of gold and cryptocurrencies. “Financial institutions want to be a part of it, regulators don’t want to clamp down on it too much,” he said. “We’re almost past the inflection point, where it’s part of the system, and it’s going to be very, very hard to extricate it.”
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