Market experts have consistently emphasized that cryptocurrencies require increasing liquidity to sustain a prolonged rally. As it stands, the crypto market could be on the brink of an explosion due to the kind of growth being recorded in the stablecoin sector.

The latest weekly report from the market research platform CryptoQuant has revealed that the market capitalization of stablecoins is expanding and has reached unprecedented highs. This indicates that liquidity is growing in the crypto market, and there is more capital waiting to be deployed.

Market Sees Rise in Liquidity

According to CryptoQuant, the stablecoin market cap has grown 17% year-to-date (YTD), increasing by $33 billion to a record $228 billion. Analysts say this growth has been supported by the wider adoption of stablecoins for payments and transfers, increased crypto trading activity, and improved regulatory clarity in the United States, thanks to the Trump administration.

Tether’s USDT and Circle’s USD Coin (USDC) have been driving the growth in the stablecoin market cap. Since the beginning of the year, USDT has grown its market cap by 13% to $155 billion, adding $18 billion.

Within the same timeframe, USDC has significantly recovered from the hit it suffered in March 2023, following the collapse of Silicon Valley Bank (SVB) during the U.S. banking crisis. At the time, USDC depegged from $1, and its market cap fell as low as $24 billion before the end of that year. So far in 2025, the market cap of USDC has increased by 39% to $61 billion, representing an increase of $17 billion.

Staked Stablecoins Record Growth

Furthermore, CryptoQuant found that the amount of stablecoins on centralized exchanges (CEXs) has rallied to record-high levels. The value of ERC20 stablecoins on CEXs has reached approximately $50 billion. Analysts attributed most of this growth to USDC, which has seen its exchange reserves increase by 1.6x to roughly $8 billion so far in 2025.

Besides the growth seen in USDC, CryptoQuant also noted that the value of yield-bearing stablecoins, which are also staked assets, has recovered and reached a level not seen since late March.

Since they plunged to a local low on May 23, the total value of yield-bearing stablecoins has risen 28% to $6.9 billion.

“This recovery was driven by sUSDe, which increased by $1.23 billion, and sUSDs, which gained 35%—or $0.7 billion—in market cap over the same period,” CryptoQuant analysts added.

Bitcoin (BTC) rebounded above $110,000 on June 9, regaining ground lost in last week’s selloff as investors rotated back into digital assets on the back of strong ETF inflows, easing macroeconomic tensions, and renewed optimism across risk markets.

The world’s largest crypto reached an intraday high of $110,653 from a daily low of $105,426 earlier in the day during Asia and UK trading sessions. As of press time, Bitcoin was trading at $110,200, up 4.10% over the past 24 hours.

The sharp climb comes amid strong demand from institutional and corporate buyers, especially via spot Bitcoin ETFs, as a key driver behind the move. Additionally, easing geopolitical tensions between the US and China, as well as momentum on a US Bitcoin reserve renewed optimism in the market.

Spot exchange-traded crypto funds issued by BlackRock, Fidelity, and other major US firms have collectively seen over $11 billion in inflows over the past seven weeks, solidifying Bitcoin’s inclusion into traditional financial portfolios.

On-chain data shows that BTC reserves on centralized exchanges continue to decline, suggesting reduced selling pressure even as prices rise. The latest move may also restore investor confidence after the asset failed to hold above $108,000 in earlier sessions this week.

Bitcoin’s rally also coincides with fresh accumulation from high-profile firms. Strategy confirmed a recent purchase of 1,045 BTC between June 2 and June 6. Meanwhile, corporate interest in adopting Bitcoin as a treasury asset is continuing to gain steam and filings are picking up pace in recent weeks.

While volatility remains elevated, the $110,000 breakout could set the stage for a push toward $115,000 and eventually $120,000 if macro conditions remain favorable, which would put BTC in line with Standard Chartered’s projections for the second quarter.

The wider crypto market also showed strength despite trading far from its all-time highs. Ethereum (ETH) was up nearly 6% to $2,660, while Solana (SOL) climbed 4% to $159 as of press time.

Meanwhile, BNB and XRP were up 2% and 2.53%, respectively, while Dogecoin (DOGE)  and Sui were roughly 6% each over the past day.

Despite growing optimism, sharp reversals remain possible in the event of ETF outflows or renewed macro pressure stemming from geopolitical risks.

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