Stablecoins surge to record high — Is this the strongest bullish signal since 2021?

Stablecoins are reaching record levels across multiple metrics, fueling speculation that the crypto market may be on the verge of a new rally. 

The growing significance of stablecoins as “dry powder” in cryptocurrency markets was highlighted in an Aug. 19 analysis by CryptoQuant contributor XWIN Research Japan. The post pointed to record supply, rising exchange reserves, and strong inflows as possible catalysts for the next rally.

Stablecoin liquidity metrics signal market readiness

Three liquidity metrics – the total supply, exchange reserves, and netflow – define stablecoin impact, per the analysis. The total supply has increased to $160 billion, the highest amount ever recorded, indicating a sizeable amount of capital moving through the crypto ecosystem.

Exchange reserves have also risen, now around $32 billion. Rising exchange reserves have historically come before notable increases in both Ethereum ( ETH ) and Bitcoin ( BTC ) price.

Daily net inflows of more than $1.2 billion, on the other hand, indicate that new liquidity is entering trading platforms, which is often an early sign that institutions and whales are preparing to deploy capital.

Data from DefiLlama reinforces this picture. The global stablecoin market cap now stands at $276.8 billion, with Tether ( USDT ) dominating 60%. According to analysts, these levels provide cryptocurrency assets with instant purchasing power, supporting the idea that stablecoins have evolved from simple payment tools into market cycle engines.

Genius Act and stablecoin growth

The liquidity surge comes shortly after the passage of the GENIUS Act, signed into law by President Donald Trump on July 18. The legislation establishes a federal framework for U.S. dollar–pegged stablecoins, requiring issuers to maintain 1:1 reserves in liquid assets while complying with transparency and anti-money laundering standards.

By clarifying rules, the Act has reduced uncertainty for banks, fintechs, and major retailers considering stablecoin issuance. Companies like JPMorgan , Amazon, and Walmart are now looking into stablecoin models, suggesting a shift toward broad adoption. Treasury Secretary Scott Bessent has stated the stablecoin market could reach $2 trillion in the coming years, which could reshape the liquidity of digital assets.

As yield-bearing stablecoins are still prohibited by the Act, institutional investors are shifting their funds to tokenized assets and blockchain networks. Because of the historical relationship between stablecoin growth and significant cryptocurrency rallies, analysts believe that this dynamic could direct more liquidity into Bitcoin, Ethereum, and other assets.