Impact of stablecoin on Bitcoin and altcoin values

The stablecoin market cap has reached a record high of over $200 billion, marking a significant increase from $121.18 billion in August 2023. This growth, driven particularly by USDC's rising prominence, raises questions about potential increases in Bitcoin and other altcoins.

Data indicates that while USDC and Tether's USDT are the leading stablecoins, other stablecoins have experienced average growth since 2024. USDT's market cap peaked at $140 billion in December 2023 and currently stands at approximately $139.4 billion, holding a dominance of 63.84%. In contrast, USDC’s market cap has surged over 120% since November 2023, reaching $53.4 billion, backed by a significant increase in demand and trading volume.

USDC's market share has risen to 24.6%, with its circulating supply more than doubling compared to its 2023 low. This increase follows a drop in altcoin values, as investors have shifted their assets into USDC. Despite a previous decline in USDC's market value due to external factors, the current trend suggests heightened interest and potential growth ahead.

The current dominance of USDC is similar to levels seen at the end of the 2021 bull market, which preceded a downturn. Analysts suggest that if USDC's dominance continues to rise, it might indicate increased caution among investors, potentially signaling a market peak. Conversely, a decline in dominance could indicate a bullish trend. Overall, the stablecoin market's growth may suggest ongoing positive momentum for cryptocurrencies in the near future.