You’ve heard of alt season. NFT season perhaps. But stablecoin season? Is that a thing? It is now. Since the start of the year, stablecoins have been locked into one mode – Up Only, even if it’s just their market cap as opposed to their price that’s pumping. The people like the stablecoins, and not just crypto traders seeking sanctuary from market volatility: there are increasing signs that institutions are loading up on stables to support their own aims.
The major stablecoin issuers have minted $30B of stablecoins since the turn of the year, with this activity heightening in the wake of Circle’s IPO. It roared out the gates at the start of June, elevating its stock into the hottest ticket on Wall Street and causing investors to reappraise everything they thought they knew about crypto.
Circle Sexes Up Stablecoins
For a company that’s in the unexciting business of stablecoin issuance, Circle has sure gotten a lot of institutional investors hot under the collar. The sort of double-digit moves that were once Bitcoin’s preserve are now a routine occurrence for CRCL shareholders upon waking up each morning. While the market tries to figure out how much Circle is worth (spoiler alert: multiples more than the $31 a share it IPO’d at), a radical change is occurring onchain, where the users and use cases for stablecoins are diverging.
It’s a sea change that is nevertheless hard to pinpoint for those accustomed to sailing in crypto’s choppy waters. Ask the average retail trader and they’ll tell you that stablecoin volumes are up because everyone’s trading perps on Hyperliquid or because whales are buying BTC. While there’s a grain of truth in both of these assessments, they’re not the reason why the stablecoin printer at Tether and Circle HQs is running hot.
One expert who believes they do have a handle on the uptick in stablecoin demand is Andrei Grachev, Managing Partner of stablecoin protocol Falcon Finance. “As someone who’s been running market-making operations across both centralized and decentralized venues, I can tell you we’re witnessing a fundamental shift in how institutional capital views stablecoins,” he begins.
“What started as simple liquidity facilitators has evolved into something much more strategic. The Circle IPO was a watershed moment because it demonstrated that public markets finally understand the infrastructure value proposition here. We’re not talking about speculative crypto assets anymore; we’re talking about regulated, compliant monetary infrastructure that’s garnering serious institutional validation. And the data backs this up.”
Institutions Like What Circle Is Selling
The data to which Andrei Grachev is referencing appears to bear out his assessment. He explains: “We’re seeing onchain stablecoin volumes consistently matching, and in many cases exceeding, what we observe on traditional centralized exchanges. This isn’t some DeFi summer narrative. This is real institutional capital flowing through these protocols.
“Treasury managers who were previously confined to traditional money markets are now able to access 24/7 global liquidity while maintaining the stability profile they require. It’s creating a bridge between the traditional treasury function and the always-on nature of digital asset markets.”
In other words, this isn’t simply institutions looking to hedge against volatile cryptos or participate in lending for a few basis points: it’s about taking advantage of the ability to trade around the clock and squeeze the pips out of the global markets that blockchain supports. Equities, commodities, and everything else that can be tokenized and placed onchain. The RWA sector is up another 5% in the past 30 days, and the total number of stablecoin holders has risen 3% to 169M during the same period.
To attribute this trend solely to “the Circle effect” is to oversimplify of course. It’s impossible to examine the spike in stablecoin volumes and capitalization without citing the GENIUS Act, whose passage by the Senate has effectively given institutions the green light to go. Those who were hanging back from moving assets onchain until the regulatory uncertainty was resolved are now making up for lost time.
Dollars on Tap
If the success of the Circle IPO, followed by approval of the GENIUS Act, can be credited with turning on the tap for stablecoin flows, it’s instructive to consider where all those dollars will ultimately end up. The same institutions depositing billions of dollars into Circle accounts in order to receive USDC are just as capable of reversing the process when they’ve done what they came to do onchain.
But should they like what they find, such as the ability to trade 24/7 and to generate yield from products that simply aren’t available in TradFi, there’s a good chance those stables will be staying right where they are. They might not be fueling the next alt season or resurrecting NFTs, but make no mistake: institutions are now here. And they’re not going anywhere.