Crypto market liquidity crunch persists despite record stablecoin supply

The crypto market continues to face a liquidity crunch despite the total market capitalization of stablecoins reaching an all-time high, BeInCrypto reported. According to data from DeFiLlama, the total stablecoin market cap surpassed $313 billion on March 8, an increase of approximately 1.8% since the beginning of the year. While a rising stablecoin supply typically signals an increase in capital waiting to purchase cryptocurrencies, recent data shows these new funds are not flowing into exchanges. The outlet suggests this phenomenon indicates that stablecoins are being integrated into a broader financial ecosystem beyond trading, with applications in cross-border remittances, inflation hedging, and the trading of tokenized stocks. The development of AI-powered autonomous trading systems is also accelerating their use in these areas. Experts believe the market trend will only turn positive once this liquidity returns to exchanges, the report added.