The tides may be turning on the crypto market. Meanwhile, stablecoins have recently reached a total market capitalization high of about $250 billion. Given the leap in stablecoin liquidity and Bitcoin’s consolidation, these factors paint a strong bullish picture for an incoming altcoin market rally. Bitcoin and stablecoins continue to out compete in crypto, maintaining a strong 73.5% market share. Such dominance usually heralds the start of a huge capital rotation into altcoins.

Stablecoin Surge and Market Dominance

The issuance of stablecoins has still been a very positive trajectory, with several billion pouring into the market on a weekly basis. This demand-driven uptick in stablecoin supply indicates a strong liquidity condition in the market, honed towards a meta eagerness for capital deployment. In fact, supply of stablecoins has ballooned by nearly $30 billion over the last 90 days. This surge is another indicator that strong liquidity is entering the crypto market. Tether (USDT) holds an impressive 66.2% of the overall market share, dominating the stablecoin market. It accounts for roughly 7.5% of the total crypto market.

Historical Trends and Future Outlook

Large-scale increases in the reserves of any given stablecoin have in the past sparked major capital inflows into competing so-called “alto-coins”. These other cryptocurrencies are often called altcoins. Altcoins have been under a squeezer during the last variety of months. In that context, the liquidity currently accruing in stablecoins has the potential to provide some significant, much-needed relief. This significant inflow is a clear signal that investors are primed and poised. They’re hoping to put their capital to work as quickly as a defined opportunity starts to materialize, especially in the altcoin space.

Expert Analysis and Predictions

Positive signs such as healthy stablecoin reserves and solid consolidation in Bitcoin point to a build-up period. These conditions historically ignite a wave of altcoin activity as risk appetite resurfaces. Even Joao Wedson says the altcoin trend could begin in the third quarter of 2025.

the Altcoin trend might start in the third quarter of 2025 - Joao Wedson

74% Usually when Bitcoin and stablecoins dominate this much market share, it’s at a level where capital rotates into altcoins.