The stablecoin sector, led by Tether (USDT), has surged following Donald Trump’s US election win back in November 2024. It has gone from strength to strength since, amid economic shifts and US Treasury strategy.
USDC (USDC) and Tether (USDT) alone have a combined market capitalization of more than $200 billion, crossing this level for the first time ever. Per CoinGecko, the market cap of USDC and USDT, whose value is pegged to the US dollar, is sitting at around $201 billion.
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Stablecoin Demand Heightened As Investors Seek Flight To Safety From Volatile Bitcoin And The Wider Market
Demand for stablecoins has been strengthened by investors seeking relief from the ever-sliding digital assets, led mainly by Bitcoin (BTC) and Ethereum (ETH).
USDC is nearing $60 billion market cap and has gained more than $25 billion since the November 2024 election. USDT is still the leading stablecoin, with a $142 billion market cap, having gained about $17 billion since Trump’s election victory.
Another major stablecoin, USDS (formerly DAI), has also seen a spike in market cap within the same time frame. It is up from $5 billion to over $8 billion over the last four months, making it the third largest stablecoin behind USDC and USDT.
The final USD-backed stablecoin of note is Ethena’s USDE token. Since the election, it has more than doubled in market cap, from around $2.4 billion to its current valuation of $5.4 billion.
Per CoinGecko , the combined market cap of all USD-backed stablecoins sits at $227 billion, with over $67 billion in daily trading volume.
While USDT, USDC, USDS and USDE make up 90% of the market cap and volume, there are 111 USD-backed stablecoins within the category.
The other notable stablecoin in this sector is PayPals relatively new PYUSD. It has seen a spike in daily volume, consistently hitting over $500 million per day.
It has a market cap of more than $700 million as it slowly climbs back toward $1 billion, a level it previously hit in September 2024.
US Treasury Secretary Scott Bessent Bullish On Stablecoin At Recent Digital Asset Summit
Bessent: We are going to keep the U.S. the dominant reserve currency in the world and we will use stable coins to do that. pic.twitter.com/MJPLRa6TJp
— Acyn (@Acyn) March 7, 2025
At the Digital Asset Summit on Friday (March 7), US Treasury Secretary Scott Bessent said, “We are going to keep the U.S. the dominant reserve currency, and we will use stablecoins to do it.”
He pledged to use the digital assets to help maintain the US Dollars’ place as the world’s reserve currency.
Bessent’s remarks come at a time when there are concerns over macroeconomic and geopolitical uncertainty. There are fears from the US that the current geopolitical landscape could lead to a decline in foreign demand for US debt, pushing treasury yields higher.
In the past year alone, Japan and China, the two largest holders of U.S. Treasuries, have reduced their holdings significantly.
For the dollar to maintain its status as the world’s reserve currency, there must be consistent demand for US debt. This has led the Trump administration to earmark stablecoins as an ideal partner in this strategy.
The theory is that by holding US debt as reserves, stablecoins can help lower Treasury yields while simultaneously expanding the global reach and dominance of the dollar.
Stablecoins need to have dollars available to repay investors looking to cash out. It so happens that Tether, the firm behind the largest stablecoin (USDT) is already one of the largest holders of three-month U.S. Treasuries.
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The combined market cap of the Stablecoin sector has surged following Donald Trump's election win
- Tether (USDT) and USDC (USDC) make up over 85% of the stablecoin market cap valuation
- USDS and USDE are the next two largest dollar-backed stablecoins, both have seen significant gains since November 2024
- US Treasury Secretary Scott Bessent said at the Digital Asset Summit last week that stablecoins will be used to maintain the US Dollar’s position as the global reserve currency
- Best Wallet (BEST) nears $11m in presale funding as downloads and active users of this hot new web3 wallet continue to soar
