Crypto liquidity rises as Ripple gears up to enter the stablecoin market

While Ripple is testing the waters with its new stablecoin project, the broader crypto market is currently experiencing a sharp increase in liquidity, particularly due to the influence of stablecoins.

Ripple, in particular, is on the verge of entering the stablecoin space with the launch of Ripple USD (RLUSD) in the coming weeks. Ripple president Monica Long confirmed that the project will launch this year.

Currently in beta testing, millions of RLUSD tokens have been minted and burned on the XRP Ledger and Ethereum blockchain networks.

Ripple’s stablecoin aims to deliver greater liquidity and efficiency by targeting the growing demand in the stablecoin market. The growing demand for stablecoins is evident in the increased liquidity in the market.

By late September 2024, the total market cap of major USD-backed stablecoins reached $169 billion, according to CryptoQuant’s latest weekly report. This represents a 31% increase year-to-date and adds $40 billion of liquidity to the market.

Stablecoins such as Tether (USDT) and USD Coin (USDC) continue to lead the rise, playing a key role in supporting overall crypto liquidity.

Tether’s USDT, the largest stablecoin in terms of market value, has increased by $28 billion since the beginning of the year, reaching $120 billion. The growth comes despite regulatory challenges regarding MiCA, as Coinbase plans to delist the asset in the EU.

USDT’s $120 billion valuation gives it a commanding 71% share of the stablecoin market. Meanwhile, Circle’s USDC, which is fully MiCA compliant, follows with a market cap of $36 billion in 2024, representing a 44% increase. Ripple had previously confirmed that the upcoming RLUSD would be regulatory compliant.

This increase in stablecoin liquidity has a significant impact on centralized exchanges. USDT balances on these platforms are at an all-time high; The $22.7 billion held on the Ethereum network represents a 54% year-to-date growth.

Additionally, $8.5 billion worth of USDT is available on centralized exchanges through the TRON network. Larger stablecoin reserves on exchanges generally correlate with higher prices of Bitcoin (BTC) and other cryptocurrencies.

But despite this influx of liquidity, the price of Bitcoin has remained relatively stable, although USDT balances on exchanges have increased by 20% since August 2024.