⚡️Stablecoin Supply Surges by $7B - What Happens to BTC?
Plus the Treasury’s stablecoin bet, 9% yield on SOL, and what this week’s macro signals mean for crypto
Read Time: ~5 minutes
⚡Snapshot
Analysis of Treasury’s stablecoins report
Member Presentation Thursday
Easy 9% yield on SOL
Key events this week
📖 Recommended Reads
“Tether AI tech will enable an unstoppable peer-to-peer network of billions of agents”
⚡How the Treasury views stablecoins
Slides from the US Treasury’s report
⚡Vitalik: Ethereum should be as ‘beautifully simple’ as Bitcoin
How it gets there
⚡$8b Blockchain hub to be built in the Maldives
Dubai-based family office plans investment into the country to tackle looming debt crisis
⚡Strategy now owns over 2.6% of entire BTC supply
Strategy made another BTC purchase. Total holdings: 555,450 BTC
⚡Crypto’s Hottest Ecosystem — a Deep Dive
Patrick and Dynamo DeFi team will be presenting a deep dive into one of crypto’s hottest ecosystems that most DeFi users are ignoring. This is part of our monthly group Zoom, where we go through the latest narratives driving the crypto market. Thursday at 5:30pm EDT.
Live attendees can ask questions along the way, getting answers to the things they care about most.
This call is available only to Pro Members, who receive a new prepared presentation every month. Recording will be posted for those who cannot attend live.
Click here to receive an invitation to Thursday’s call →
RSVP link will be sent to Pro Members shortly. Members can bring a friend.
🔢Onchain Analysis
Stablecoin Market Cap Hits All-Time High
Stablecoins added over $7b in market cap over the last month.
The largest stablecoin addition came from Tether, which added over $5b on its own.
Circle’s USDC added just under $1b over the same time frame. BlackRock’s BUIDL market cap grew 46%, adding over $900m.
USDT dominance has fallen from 70% to 62% in the last 6 months (the lowest level in two years), but Tether’s relative growth over the last 30 days flattened the decline.
Favorable regulation and even a use case for the government (as a mechanism to find marginal treasury buyers) are propelling stablecoin popularity outside of the crypto world and into global finance.
A detailed report from the US Treasury displayed the potential for stablecoins with several use cases given current regulations.
The Treasury believes stablecoins could “Witness Exponential Growth in Response to Market and Regulatory Breakthroughs” and grow to a $2tn market by 2028. The growth would be driven by institutions and the migration of financial activities onchain.
This report from the Treasury is impressive. We’ve discussed stablecoins and their potential for quite some time, and getting confirmation on this potential from such a big player is music to our ears.
We believe this 2028 projection is conservative, and think stablecoins could grow to a $1tn market cap this year.
If onchain activity pushes stablecoins to such a massive valuation, will demand for digital assets like Bitcoin be higher or lower? That’s an easy question. Higher. The more pertinent question is how much higher they’ll be.
As stablecoins see more usage in our every day lives, digital assets will rise in prominence as well. Networks like Ethereum and Tron facilitate stablecoin transactions. Assets like Ethereum and Bitcoin serve as collateral for crypto-backed stables. DeFi protocols like Ethena and Sky have stablecoins of their own. DEXs like Curve facilitate the exchange of these stables. All of these will grow in usage with stablecoin growth.
Furthermore, finance moving from analog to digital, offchain to onchain, will translate to greater acceptance of other onchain solutions. BTC as a store of value, for example. More stablecoins means more money in the onchain economy.
Thought exercise: In May 2023, BTC’s market cap was ~$550b. Stablecoin market cap was $130b, about 23% of BTC’s market cap.
Today, Bitcoin’s market cap is ~$1.8tn. Stablecoin market cap is $240b, about 12% of the BTC market cap.
Assuming stablecoins grow to at least $1tn, and return to around 25% of BTC’s total market cap, that’s a $4tn BTC market cap. Moon math? Yes. Impossible? Time will tell.
🚜Farm of the Week
Earn 9% on your SOL tokens with JupSOL
Liquid Staking Tokens (LSTs) are yield-bearing tokens that are liquid and tradable, meaning you can use them throughout DeFi.
The largest LSTs on Solana are Jito’s JITOSOL, Marinade’s mSOL and Jupiter’s JupSOL.
Jupiter’s JupSOL is the highest earner right now - currently 9.25% APY.
How it Works
Head to Jupiter’s aggregator website. Connect your wallet, and swap any token for JupSOL. Once swapped, you’ll start earning APY simply by holding JupSOL in your wallet.
LSTs are usually a different price than their native token counterpart, but they’re designed to move together as closely as possible.
Risks
Risk level: low
Layering risk - by delegating a stake, you’re relying on another set of developers and smart contracts to manage the peg to native SOL
This Week in DeFi Metrics
⚡Stablecoin Market Caps Decreasing on These Chains
These chains saw significant stablecoin market cap decreases over the last 24 hours:
Arbitrum -0.70%
Sei -1.36%
Hyperliquid -0.57%
Berachain -4.72%
Be the first to know when money is leaving chain ecosystems. Get stablecoin market cap changes, DEX volume growth and other timely updates from the DeFi Alerts channel.
Available only in the Dynamo DeFi Discord. Upgrade to Pro Today for immediate access →
🛠️Tool Spotlight
Track BTC & ETH ETFs with DeFiLlama
Get a detailed breakdown of daily, weekly, monthly and cumulative ETF flows using DeFiLlama’s ETF dashboard.
Daily ETF flows are especially helpful for gauging current sentiment and potential trend changes.
Each ETF can be individually tracked - covering flows, AUM and volume.
More helpful DeFi Tools: The Dynamo DeFi Crypto Tools List
📅Key Events This Week
Macro Events
📊 S&P Global Services PMI data - May 5th
📊 ISM Non-Manufacturing PMI data - May 5th
📊 Fed Interest Rate Decision & Press Conference - May 7th
📊 Initial Jobless Claims data - May 8th
📊 20% of S&P 500 companies report earnings
Token Unlocks: $144m Unlocking This Week
🔓Tokenomist: Track token unlocks and make better investment decisions. Use my code DDNM5 for 5% off Pro Plans.
🔓ORDER (0.59%) - May 5th
🔓SPEC (70.90%) - May 6th
🔓ENA (1.41%) - May 6th
🔓SHADOW (10%) - May 6th
🔓IMX (1.03%) - May 7th
🔓GMT (3.06%) - May 8th
🔓ENS (2.81%) - May 9th
🔓FLR (2.92%) - May 10th
🔓LAYER (12.87%) - May 11th
Launches & Updates
Note that these launches are mostly unvetted by the Dynamo DeFi team and this isn’t an endorsement of any of them.
🚀 Thorchain TCY launch - May 5th (Source)
🚀 Kaspa crescendo v1 mainnet launch - May 5th (Source)
🚀Hyperliquid new fee system and staking tiers release - May 5th (Source)
🚀 Golem testnet alpha release - May 5th (Source)
🚀Casper 2.0 launch - May 6th (Source)
🚀Quill finance launch - May 7th (Source)
🚀 Ethereum Pectra mainnet launch - May 7th (Source)
🚀 Grok AI-based crypto agent launch - May 10th (Source)
⚡Favorite Resources
If you want to dive deeper, here are some of my favorite resources:
🛠️ The Dynamo DeFi Crypto Tools List: A comprehensive list of 100+ crypto tools to help with portfolio tracking, analytics, airdrops and more.
🚀 RocketX: The 1-stop-shop to get the best rates for on-chain & cross-chain swaps.
🛡️ Ledger: The smartest way to secure your crypto. Buy & sell crypto with full control over your assets.
For more frequent content, follow me on Twitter and YouTube.
Until next time,
Dynamo DeFi
Bullish on stablecoins