The Federal Reserve postponed a key rate cut decision until September, sparking a surge in the cryptocurrency market. At the same time, the issuance of stablecoins in the market has increased dramatically, with nearly $10 billion of stablecoins expected to flow into the market in the coming weeks. The scale of this liquidity influx far exceeds the liquidity of Bitcoin ETFs, injecting new vitality into the crypto market. While Circle typically serves more regulated institutional investors, the recent surge in stablecoin inflows to 40% shows an increase in allocations by large market participants. This trend may also reflect the rise in DeFi (decentralized finance) activities, especially the increase in USDC minting.

So far this year, stablecoin inflows have reached $35 billion, bringing the total value of stablecoins in circulation to $160 billion. After the July FOMC (Federal Open Market Committee) meeting, U.S. bond yields fell sharply, with the 10-year U.S. Treasury yield falling below the key threshold of 4.0%, which directly promoted the recovery of DeFi activities. In August in particular, Aave's monthly lending platform fees reached $43 million, surpassing the peak of $42 million in March 2024. Although DeFi activity slowed in September, activity and platform fees are expected to rebound in the coming months as the Federal Reserve may be about to cut interest rates.

The market structure has also changed significantly after last week's FOMC meeting. Bitcoin's market dominance has begun to weaken, while Ethereum's gas fees have soared, reflecting a significant increase in altcoin activity. If the Fed continues to maintain its attitude of cutting interest rates, investors' interest in high-beta altcoins may rise further. Retail cryptocurrency trading activity is also on the rise in South Korea in particular, with daily trading volumes currently stabilizing at around $2 billion. Although it has dropped from $13 billion in early March 2024, altcoin trading volume has exceeded Bitcoin's market share in the past week.