Whale Activity and Growing Utility Fuel Surge

Stablecoin transaction volume on the Ethereum network reached an unprecedented $2.8 trillion in October, marking a 45% monthly increase from the previous record of $1.94 trillion set in September. This surge was largely driven by large-scale investors, or “whales,” accumulating Ethereum and leveraging stablecoins for liquidity.

The total market capitalization for stablecoins on Ethereum now exceeds $165 billion. Tether’s USDT continues to lead the pack with nearly 86 billion in circulation on the network, an 8.1% increase over the last month. Its primary competitor, Circle’s USDC, has over 48.2 billion in circulation, reflecting a monthly growth of 5.8%. On-chain data further reveals that stablecoin transfer volume on Ethereum has climbed by 1,000% since May 2023.

This rapid adoption is fueled by a growing demand for practical applications like cross-border transfers, real-time settlement, and payment systems that operate outside of traditional banking hours. Stablecoins are increasingly used in remittances, Decentralized Finance (DeFi), corporate treasury management, and consumer payments. The sector is also seeing innovation, with new stablecoin models attracting users seeking returns through strategies like yield farming.

Issuers Capture Majority of Crypto Revenue

According to Kronos Research CIO Vincent Liu, the rising volume indicates that traders are actively managing their liquidity, using stablecoins as a hedge and a tool to prepare for buying opportunities during market dips. This strategy allows them to rotate capital between different digital assets efficiently.

This increased activity has translated into significant earnings for stablecoin issuers, who now account for 60% to 70% of the total daily revenue across major crypto categories. Companies like Tether generate profit from the assets backing their stablecoins, typically holding user deposits in low-risk instruments such as U.S. Treasuries. Tether’s CEO, Paolo Ardoino, recently announced that the firm is on track to generate $15 billion in profit by the end of the year.

While the stablecoin market thrives, the broader crypto market has seen a downturn. At the time of writing, Ethereum was trading at approximately $3,713, down over 17% in the past 30 days. Bitcoin was trading near $105,773, reflecting a drop of more than 13.2% over the same period.

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A Surge in On-Chain Activity

On-chain data reveals a dramatic 1,000% increase in stablecoin transfer volume on the Ethereum network since May 2023. Stablecoins now represent about 60% of the crypto market, with a total circulating supply exceeding $308 billion. This growth has pushed the annual transaction volume for stablecoins past $27 trillion, a figure that accounts for roughly 1% of daily global payment flows. If this trajectory continues, stablecoin settlement volumes could potentially surpass those of traditional finance (TradFi) networks within the next decade.

The market is led by Tether (USDT), which commands a market capitalization of over $183.6 billion. It’s followed by USDC, with a market cap of approximately $75 billion, making up around 41% of the stablecoin sector.

Drivers of Adoption and Shifting Strategies

The widespread adoption of stablecoins is fueled by a growing demand for efficient cross-border transfers, real-time settlement, and access to payment systems outside of standard banking hours. They have found significant utility in remittances, decentralized finance (DeFi), trading, corporate treasury management, and various consumer payment platforms.

According to industry research, stablecoin issuers are increasingly shifting their focus from simply expanding issuance to competing on infrastructure. The priority is now on developing foundational networks that enhance settlement and utility. Key examples include Tether’s plasma offerings for retail and institutional payments and Circle’s recently introduced Arc infrastructure platform.

Issuers Dominate Crypto Revenue

Stablecoin issuers have become the dominant revenue generators in the cryptocurrency industry, accounting for an estimated 60% to 70% of the total daily revenue across major categories like blockchain infrastructure, lending, and decentralized exchanges. Their business model involves backing their stablecoins with user deposits held in low-risk, interest-bearing instruments such as U.S. Treasuries. Tether’s CEO, Paolo Ardoino, recently announced that the firm is on track to generate $15 billion in profit by the end of the year.

Vincent Liu, CIO of Kronos Research, suggests the rising volume indicates that traders are actively managing their liquidity. He argues that traders are using stablecoins as both a hedge and a yield-generating tool, positioning capital to buy price dips and rotate between different digital assets amid ongoing profit-taking.

Recent Market Performance

The increase in Ethereum stablecoin volume last month coincided with a market rebound following a crash on October 11. At the time of publication, Ethereum is trading at approximately $3,713, reflecting a 3.7% decline in the last 24 hours and a 17.11% drop over the past 30 days from its all-time high of around $4,813.

Bitcoin has also seen a downturn, falling over 4.1% in the last 24 hours. The leading cryptocurrency has declined nearly 8% in the past week and more than 13.2% over the last month.