According to data, stablecoin transactions on the Ethereum network were phenomenal in October, reaching a record-breaking $2.82 trillion. This was a 45% increase from the previous month. The enormous rise shows traders’ continued move toward yield-generating assets despite the crypto market overall seeming to slow down.
Such a figure is well beyond the previous record of $1.94 trillion that was set in September. The spike was mostly due to the heavy trading activity of Circle’s USDC and Tether’s USDT. USDC was the leader by a long shot in the total volume of the month, with $1.62 trillion, while USDT trailed with $895.5 billion. On the other hand, MakerDAO’s DAI was down slightly, with only $136 billion compared to $141.2 billion in the previous month.
The concerted increase in stablecoin transactions on the Ethereum network is viewed by analysts as a move by traders to manage liquidity and chase higher returns. Min Jung, research associate at Presto Research, points out that the farming of yield tokens, especially around liquid yield tokens, has gained momentum, and therefore, investors looking for returns in an uncertain market are the ones getting attracted.
It is noteworthy that such vigorous activity took place at a time when major cryptocurrencies were retreating from the highs they had recently reached. Over the last month, Bitcoin dropped by 11.5% to $108,229, and Ethereum was down by 16.4% to $3,754. As the prices were falling, traders turned to stablecoins as the safest and most convenient instruments with which to rotate capital and manage risks in decentralized finance ecosystems.
Based on industry figures, stablecoin issuers were the top revenue generators among crypto protocols in October. They were responsible for 65% to 70% of the total daily revenue, thereby outstripping other sectors such as lending platforms, decentralised exchanges, and blockchain infrastructure.
Vincent Liu, Kronos Research CIO, mentioned that the increasing volume indicates traders are “staging capital to rotate between emerging narratives, using stablecoins as both a hedge and a yield tool until deployment.” At the same time, Nick Ruck, director at LVRG Research, said that the October surge is a reflection of a maturing crypto ecosystem in which stablecoins are increasingly being used for payments and cross-border transactions, besides speculative trading.
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