Stablecoins, Bitcoin, and the future of crypto – All you need to know

Stablecoins are gaining traction, cementing the U.S. dollar’s dominance in the digital age
Could this be the next evolution of global financial power?

Are stablecoins the key to maintaining U.S dollar dominance? David Sacks thinks so.

With real-world applications from cross-border transactions to acting as a safe haven in volatile markets, stablecoins have surged in adoption – Pushing their combined market cap past $227 billion.

However, with stricter regulations on the horizon, could the crypto landscape shift from being Bitcoin-centric to one that’s more focused on “digital assets?”

A strategic shift into stablecoins

We’re in the digital age. While the U.S dollar has been the global currency, stablecoins are quickly stepping up. No wonder, the new administration is focusing on legislation that could make stablecoins an alternative to the dollar.

Why does this matter? The U.S debt market has reached an all-time high of $36.22 trillion. To manage this, it’s critical to keep interest rates low. One way to do this is by inflating the supply of stablecoins.

While Trump has previously touted Bitcoin as a way to pay off the debt, stablecoins present a more practical solution. As history has shown, increasing stablecoin supply often boosts Bitcoin’s price, soaking up liquidity.

This shift triggers a drop in U.S yields and stabilizes interest rates, as investors scramble to scoop up Bitcoin.

Look at the numbers – Since Trump’s election win, USDT’s supply has jumped by $20 billion, bringing the total to $140 billion, while USDC has risen by $17 billion to hit $52 billion.

Source: Glassnode

To top it off, Tether has become the third-largest buyer of U.S. Treasuries, investing a staggering $113 billion in 2024.

Given all this, the stablecoin legislation is expected to take a bigger leap. In response, we’re likely to see a huge surge of liquidity flowing into the crypto market.

However, it’s not just about market movement—It’s part of a bigger plan to make stablecoins a key player in the U.S financial system.

Where does it leave Bitcoin?

The crypto market has always revolved around Bitcoin, but the game is changing. With concerns over inflating real-world assets, the focus is shifting to stablecoins.

Analysts predict the stablecoin market could soar to $1 trillion – 5x its current valuation. If the bill passes, supply is set to explode, with Tether leading the charge.