The broader crypto market is currently experiencing a surge in liquidity, especially with stablecoins, as Ripple tests the limits with a new stablecoin project.
In particular, Ripple is poised to penetrate the stablecoin space in the coming weeks with the introduction of Ripple USD (RLUSD). Ripple President Monica Long confirmed that the project will begin this year.
Currently in beta testing, millions of RLUSD tokens are being minted and burned across the XRP Ledger and Ethereum blockchain networks.
Ripple’s stablecoin targets the growing demand in the stablecoin market and aims to provide higher liquidity and efficiency. The growing demand for this stablecoin is evident from the surge in liquidity within the market.
According to CryptoQuant’s latest weekly report, in late September 2024, the market capitalization of major USD-backed stablecoins reached $169 billion. This represents a 31% increase since the beginning of the year and added $40 billion of liquidity to the market.
Stablecoins like Tether (USDT) and USD Coin (USDC) continue to lead the way and play a key role in strengthening liquidity across cryptocurrencies.
Tether’s USDT, the largest stablecoin by market capitalization, has grown by $28 billion since the beginning of the year to reach $120 billion. This growth comes despite regulatory challenges surrounding MiCA, as Coinbase plans to delist the asset in the EU.
USDT is valued at $120 billion and commands a commanding 71% share of the stablecoin market. Meanwhile, Circle’s USDC, which is fully MiCA compliant, follows with a market capitalization of $36 billion, representing a 44% increase in 2024. Ripple previously confirmed that the upcoming RLUSD will be compliant with regulations.
This rise in stablecoin liquidity has had a noticeable impact on centralized exchanges. USDT balances on these platforms have reached an all-time high, with $22.7 billion held on the Ethereum network, marking a 54% year-to-date growth.
Additionally, $8.5 billion worth of USDT resides on centralized exchanges via the TRON network. An increase in an exchange’s stablecoin reserves often correlates with an increase in the price of Bitcoin (BTC) and other cryptocurrencies.
However, despite this influx of liquidity, Bitcoin prices have remained relatively flat, even though the exchange’s USDT balances have increased by 20% since August 2024.
