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Solana's Stablecoin Surge: $10 Billion in January 2025

Coin WorldWednesday, Jan 29, 2025 4:27 pm ET

1min read

Solana's Stablecoin Surge and Institutional Interest in January 2025

January 2025 marked a significant month for Solana ($SOL) investors, with the blockchain doubling its stablecoin supply to $10 billion. This growth was fueled by the issuance of viral memecoins, TRUMP and MELANIA, and speculation surrounding the timing of a Solana ETF. The network's market cap nearly tripled over the past year, reaching over $110 billion.

Stablecoins play a crucial role in onchain investment markets, providing a stable value for investors. Today, the total stablecoin market cap is over $223 billion, with Tether's USDT and Circle's USDC accounting for 86% of the market. Over 75% of stablecoins rely on collateralization, with 98% denominated in USD.

Stablecoins serve as on-ramps and off-ramps for investors, enabling them to convert fiat currency into cryptocurrency and vice versa. As interest in cryptocurrency grows, so does the number of stablecoin projects. In 2021, there were 27 stablecoins, which increased to 182 by July 2024, a 574% growth rate.

Solana's meteoric month was driven by the minting of $8.5 billion in USDC, doubling the total stablecoin market value on the network and outpacing Ethereum. This growth in stablecoin issuance and trading activity is relevant given Solana's pitch to institutional users, as it could translate into lower transaction costs and increased institutional adoption.

Solana's benchmark throughput and transaction costs make it a viable onchain payments solution, challenging traditional card networks like Visa. With a single transaction costing roughly $.00025, Solana's efficiency becomes increasingly relevant when considering merchant fees that can range from 2.0-3.0% of transaction value.

The launch of the TRUMP and MELANIA memecoins on Solana sparked mainstream interest in the network, dividing the crypto community. While skeptics cringed at the memecoins' "horrible look," others saw potential in cryptocurrency as a viable capital raising and customer acquisition tool. Within 48 hours

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