Stablecoin activity saw a sharp rise last week, with four of the top five U.S. dollar-pegged tokens recording significant supply increases. From September 15 to 21, the total stablecoin market expanded by $1.04 billion. This growth points to a strengthening role for stablecoins in the cryptocurrency market, offering more stability amid market fluctuations.

Industry experts highlight that this surge could indicate an increasing demand for stable digital assets. With growing adoption, stablecoins are being used more frequently for trading, remittances, and other financial transactions. As their use expands, they are becoming a crucial part of the broader financial landscape, bridging traditional fiat currencies and the crypto market.

The recent increase in stablecoin supply suggests rising confidence in their utility for mitigating risks during volatile periods in the cryptocurrency space.

Major Tokens Lead the Surge

Over the past six days, the stablecoin market increased from $172.19 billion to $173.23 billion. Tether (USDT), the largest stablecoin by market capitalization, saw its supply increase by 1.5%, adding $380 million since mid-September. Circle’s USDC followed closely, growing its supply by 2.9%, which equates to a $130 million rise within the same period.

Stablecoin Smaller Players Show Strong Gains

Stablecoins like DAI and FDUSD have seen notable growth in recent times. DAI, which is known for being decentralized, recorded a 3.2% increase in value, reflecting its steady demand. Meanwhile, FDUSD expanded even more significantly by 11%, boosting its market cap to an impressive $2.94 billion. These figures highlight the strengthening position of stablecoins in the broader crypto market.

However, not all tokens shared this positive trend. Ethena’s USDE saw a sharp decline, dropping by 14.7% in value, which resulted in the loss of $80 million in supply. This highlights that despite the broader growth in stablecoins, certain tokens can experience setbacks.

On the other hand, smaller tokens like GHO and DEUSD have shown substantial growth. GHO surged by 26%, while DEUSD rose by 16.6%, showcasing strong performance over the past month. These increases indicate growing interest and adoption of these tokens, contrasting the decline seen in others like USDE.