The cryptocurrency market is witnessing a positive wave thanks to the 76 trillion USD capital flowing strongly into stablecoins, opening opportunities for Bitcoin, Ethereum, and altcoins to recover.
The large fiat capital flowing into stablecoins reflects the increasing trust of investors. This is driven by a more transparent legal framework and heightened interest from financial institutions.
MAIN CONTENT
The 76 trillion USD capital flow into stablecoins creates liquidity leverage for the cryptocurrency market.
Benefits from legal transparency and high demand from institutional investors.
Long-term positive trends despite possible short-term corrections.
What factors lead to the massive influx of capital into stablecoins?
The 76 trillion USD capital flow into stablecoins comes from various channels, primarily due to clearer legal frameworks, specifically the U.S. GENIUS Act, which helps mitigate legal risks for investors.
Additionally, Ethereum-focused ETFs are significantly increasing demand from institutional investors. Coinbase and PayPal's stablecoin reward programs also help attract retail users, even though they do not receive direct interest from issuers.
With stablecoin market capitalization exceeding 270 billion USD, coins like Tether (USDT) and USD Coin (USDC) account for over 80% of the market share, playing a key role in increasing liquidity for the cryptocurrency market.
How does increased capital flow impact the market?
Strong capital injections into stablecoins increase liquidity, helping the market respond faster when investor sentiment is positive. Accordingly, Bitcoin and altcoins may surge past key resistance levels.
The Ethereum options market is vibrant with near-record Open Interest, signaling the potential for increased price volatility in the near future. New capital flows are also driving DeFi projects and the participation of major financial institutions.
"Stablecoins are the first choice for institutional investors due to their high liquidity and increasingly assured legal transparency."
Markus Thielen, cryptocurrency analyst, 2024
Banks and financial authorities warn that profitable stablecoins could reduce deposits in traditional banks, leading to increased borrowing costs. The U.S. Treasury forecasts that the stablecoin market could reach a scale of 2 trillion USD by 2028, demonstrating its growing influence.
What will happen if the capital inflow into stablecoins changes in the short term?
In the event of macroeconomic fluctuations or new limits on stablecoin yields, capital flows may temporarily stagnate, causing short-term price corrections in cryptocurrencies.
However, long-term trends are still reinforced by infrastructure development, legal progress, and continuous interest from institutional investors. This creates a solid foundation for recovery and sustainable growth in the market.
What is the favorable development scenario for the cryptocurrency market?
If capital continues to flow strongly into stablecoins, liquidity in major cryptocurrencies like Bitcoin, Ethereum, and altcoins will significantly increase, pushing the market into a stronger bullish phase.
The entry of banks and fintech companies into the cryptocurrency space will accelerate as regulations become clearer, while DeFi projects benefit from support funds like Coinbase's Stablecoin Bootstrap Fund.
"The new wave of liquidity will help the cryptocurrency market enter a sustainable growth cycle, attracting more institutional and individual investors."
Markus Thielen, cryptocurrency analyst, 2024
Frequently Asked Questions
What does the 76 trillion USD capital flow into stablecoins mean for the cryptocurrency market?
This is a signal indicating increased liquidity and investor confidence, helping the market easily experience more robust price increases.
How does the U.S. GENIUS law affect stablecoin capital flows?
This law clarifies the legal framework, reduces risks for investors, and stimulates institutional capital flows into stablecoins.
How can stablecoins affect traditional banks?
Profitable stablecoins can withdraw deposits from banks, increasing borrowing costs and altering traditional financial structures.
Will the cryptocurrency market be able to grow long-term if there are short-term corrections?
Yes, thanks to developed infrastructure and interest from major institutions, the market is expected to continue sustainable growth.
Which stablecoins are dominating the market today?
Tether (USDT) and USD Coin (USDC) are the two largest stablecoins, accounting for over 80% of the global stablecoin market.
Source: https://tintucbitcoin.com/stablecoin-thu-hut-76-ty-usd/
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