Market capitalization of Stablecoins is still too small to absorb traditional capital flows

If you look at the current stablecoin market cap, you can see that crypto is still very small compared to traditional finance.

The total market cap of USDT + USDC is currently only about 270 billion USD. It sounds large, but after subtracting the amount of stablecoins locked in DeFi, collateral assets, exchange liquidity, and other operational needs, the truly liquid assets outside the market may not be very abundant.

Compared to TradFi, the gap is very large:
- Global stock market capitalization in 2024 is around 126.7 trillion USD.
- Global bond market capitalization is about 145.1 trillion USD.
- Just the liquid assets of American households have reached 72.3 trillion USD.
- Meanwhile, US money market funds are holding about 7.8 trillion USD, and US ETFs have over 10 trillion USD in assets.

To compare, in May 2021 — during the altcoin season that many folks still remember — the total market cap of USDT + USDC was only about 85 billion USD. That means the market has grown significantly, but it’s still very small if it wants to absorb large-scale institutional capital flows.

ETFs were created to make it easier for traditional capital to enter crypto. But in the long run, the market still needs more stablecoins, more issuers, or for Tether and Circle to continue growing stronger.

Crypto needs to have sufficient liquidity first if it wants to experience a big wave!
$USDT ‌$USDC ‌