Investors have boosted stablecoin supply by $5B since the U.S. election

Stablecoin balances across exchanges surged to a yearly high of $41 billion this week, signaling a surge in liquidity poised to support further cryptocurrency investments. This growth comes in the wake of the U.S. election, as investors flock to the crypto market, driving stablecoin supply to new levels.

The two dominant stablecoins, Tether’s USDT and Circle’s USDC, saw their combined supply rise by over $5 billion since November 5, according to TradingView data. USDT saw a remarkable $3.8 billion increase in circulation, bringing its total supply to a record $124 billion. Meanwhile, USDC grew by $1.6 billion, reaching nearly $37 billion in circulation.

The expansion of stablecoin supply is typically viewed as a bullish signal for the crypto market, suggesting a steady influx of capital. Stablecoins are widely used in the crypto space for trading and liquidity purposes, serving as a stable asset pegged to the U.S. dollar. These coins are frequently used as a tool to facilitate purchases on exchanges, with USDT dominating on offshore exchanges and USDC being the go-to for U.S. platforms like Coinbase and decentralized finance (DeFi) protocols.

David Shuttleworth, a partner at Anagram, shared that there was significant capital waiting on the sidelines before the election, with both retail and institutional investors biding their time. After the election results were in, liquidity began flowing more freely, pushing prices up.

Another noteworthy trend is the rise in Ethereum-based stablecoins on exchanges. As investors were cautious leading into the election, the balance of stablecoins on exchanges had been falling. However, after the election on November 5, these balances quickly spiked to $41 billion, a new high for the year, up from around $36 billion earlier in November, according to data from Nansen.

This influx of stablecoins coincided with a boom in the broader cryptocurrency market, as Bitcoin hit new highs following Donald Trump’s election victory, while optimism around a more crypto-friendly government increased market sentiment.

The growth wasn’t limited to USDT and USDC alone. On the Solana network, USDC’s supply increased by 14% in the last week, reaching nearly $2.9 billion, spurred by a jump in DeFi activity and transaction volumes. Similarly, USDT on the TON blockchain also saw a rise, reaching a record $1.1 billion, up 10% over the same period, as the Telegram-based ecosystem continued to attract attention.