Stablecoin Market Cap Recovers $4 Billion, But Liquidity Remains Limited
The market capitalization of stablecoins has rebounded by about $4 billion since September, recovering to around $270 billion, according to Darkfost, a CryptoQuant contributor. However, this increase accounts for only about 29% of the decline in stablecoin market capitalization since its peak in May, when it stood at around $284 billion. This means the recent recovery in stablecoin market capitalization remains weak, and more liquidity needs to flow into the market for Bitcoin to reach a new high, Darkfost noted. The current trend shows signs of reversing, but the recovery is still limited, he added.
Stablecoin market capitalization is a gauge of liquidity in the digital-asset market. The recent increase in stablecoin market capitalization is modest compared to the liquidity that previously exited the market. Darkfost's analysis suggests that the market is still struggling to recover from the decline in stablecoin market capitalization since May.