Stablecoin Surge: Mid-Cycle or Market Top?

The crypto market has been on a rollercoaster ride, with Bitcoin and other major altcoins experiencing significant volatility. However, a closer look at the stablecoin supply reveals a different story. The total stablecoin supply has reached $219 billion and continues to climb, suggesting that the crypto bull run is still far from over. This trend indicates that the market is still in a mid-cycle phase rather than approaching its peak.

Historically, stablecoin supply peaks have aligned with crypto cycle tops. In April 2022, the supply reached $187 billion—just as the bear market began. Now it’s risen to $219 billion and continues to grow, indicating we’re likely in the middle of the cycle. This suggests that the market has not yet peaked and is still in a growth phase, with potential for further upside.



The rising stablecoin supply can suggest imminent buying pressure and increasing investor demand. Stablecoins serve as a bridge between fiat currencies and crypto markets, comprising the majority of crypto trading pairs and market liquidity. The rising market cap of stablecoins indicates higher stablecoin adoption and their growing role as a preferred medium for crypto transactions. This phenomenon aligns with the recent price decline, which has seen many investors exiting their positions in Bitcoin and other cryptocurrencies and then converting them to USDT and other stablecoins. However, the fact that these funds remain in the crypto industry and are not out is positive. Although a rising stablecoin supply reflects growing investor caution, it also means a large pool of capital is ready to be deployed once market conditions improve.

The upcoming Federal Open Market Committee (FOMC) meeting on March 19, 2025, is anticipated to have significant implications for the crypto market. The market is currently in a state of uncertainty, with traders looking to the FOMC meeting for direction. The FOMC meeting is expected to provide insights into U.S. monetary policy and potential interest rate adjustments, especially with recent declines in the U.S. Producer Price Index (PPI) and initial jobless claims, signaling a slowing economy. This indicates that the market is closely watching the FOMC meeting for any signs of changes in monetary policy that could impact the overall economic outlook and, by extension, the crypto market.

Despite the potential for short-term volatility, investors remain optimistic for the rest of 2025. VanEck has predicted that Ether’s price could reach $6,000 and Bitcoin’s could reach $180,000 during 2025. This optimism is despite the possibility of short-term volatility, suggesting that investors are looking beyond immediate market movements and focusing on the long-term potential of the crypto market.

In summary, the rising stablecoin supply and the upcoming FOMC meeting suggest that the crypto market is still in a mid-cycle phase rather than approaching its peak. The stablecoin supply trend indicates that the market is still in a growth phase, with potential for further upside. Despite the possibility of short-term volatility, investors remain optimistic for the rest of 2025.

Ask Aime: Is the crypto market nearing its peak?