Solana Stablecoin Supply Explodes Past $10B, Secures New All-Time High

$SOL rose by 45% last time its stablecoin supply climbed 70% in a week - could it happen again?

Published: Jan 23, 2025 at 08:23

Solana’s stablecoin supply has exploded this week, surging past $10B for the first time ever and securing a new all-time high.

Historical data suggests that this tremendous inflow of stablecoins could trigger a violent move to the upside for $SOL, pushing the asset as high as $360 by March 2025.

However, markets are still cautious. Despite a wealth of bullish headwinds, stablecoin lending yield remains comparatively low, suggesting we’re far from peak euphoria.

Solana Stablecoin Supply Up 77% in 7D/Records 10M

Solana’s DeFi ecosystem is flourishing. Subsequent memecoin launches from the White House cabal in $TRUMP and $MELANIA have attracted billions in capital inflows, onboarding hundreds of thousands of new users to the Solana ecosystem.

Appetite for onchain trading on Solana has never been higher. With millions of traders prepping for what is expected to be a sensational 2025, Solana’s stablecoin supply is soaring to unprecedented heights.

solana stablecoins

Based on DefiLlama data, Solana’s stablecoin supply enjoyed a meteoric rise this weekend, rising 77.43% in 7D and securing a new all-time high market cap of $10.7B. Circle’s USDC remains the Solana ecosystem’s stablecoin of choice, commanding 77.23% of market dominance.

Previous Stablecoin Rise Preceded $SOL 45% Surge

Stablecoins are the lifeblood of a healthy onchain ecosystem, facilitating greater liquidity flows throughout Solana DeFi and increasing demand for $SOL. Historical data suggests that sharp increases in onchain stablecoin supply could forecast a spike in $SOL value.

artemis

On September 11, 2021, Solana’s stablecoin supply recorded a 93% increase over a 7D period, based on Artemis Data. Over the following two months, $SOL value surged by 45.76% rising from $177 to make a new all-time high of $258 on November 6th, 2021.

If $SOL were to replicate this price action following the nuclear growth of its onchain stablecoin supply, a similar 45% price increase could $SOL as high as $362 by the end of March 2025.

This price action would coincide with the launch of the $SOL futures ETF, which Senior Bloomberg Analyst Eric Balchunas predicts could hit the market by mid-March.

However, historical data doesn’t account for Solana’s DeFi remarkable growth over the past 3 and a half years. The Solana ecosystem boasts a considerably more diverse range of applications and tokens today than it did in September 2021. Liquidity flows could be more fragmented in today’s ecosystem, resulting in diminished returns compared to previous cycles.

Lending Yield Suggests Markets are Cautious

Despite the influx of new capital and fresh traders onchain, stablecoin borrowers are still playing it relatively safe.

Stablecoin lending yield throughout Solana DeFi remains comparatively low when compared to previous periods of euphoria. Following President Trump’s triumph in the November election, stablecoin lending yield spiked as high as 40% APY , with traders willing to risk it all on leveraged positions.

lulo yield

Lulo Finance, a popular lending aggregator, indicates that $USDC lending rates are currently hovering around 6-7% APY. Traders are still wary of taking leveraged positions, indicating that markets are far from peak euphoria.