Crypto Gains Preceded Diverging USDC and USDT Supply Growth

Weekly gains in non-stablecoin crypto assets were associated with slower next-week USD Coin (USDC) growth and faster Tether (USDT) growth, complicating the use of combined stablecoin supply as a gauge of Bitcoin (BTC) buying demand.

A four-year analysis matched weekly changes in non-stablecoin crypto market capitalization against stablecoin supply growth one week later. Prior market changes explained 4.6% of the variation in USDC’s weekly supply growth and 5.3% of USDT’s. The associations were negative for USDC and positive for USDT, so market gains coincided with less USDC growth and more USDT growth the following week.

That gap matters because a combined supply figure can conceal different patterns for each token. A larger total does not establish that investors have more cash ready to buy BTC, and the analysis did not trace newly issued tokens to Bitcoin purchases. Stablecoins can also be used in lending, pledged as collateral or used to make payments. Issuance data do not show how holders use the tokens.

Higher perpetual futures funding rates were associated with faster supply growth for both tokens a week later. After other factors were included, funding rates explained about 10% of weekly USDC growth variation and 4% of USDT’s. Those estimates measure statistical fit; they do not show that funding rates caused the supply changes.

A separate test using data from 2023 onward examined whether lending returns added explanatory power. It measured the carry spread by subtracting the three-month U.S. Treasury yield from Aave v3’s average supply annual percentage yield. Adding the spread improved the USDC model, but did not meaningfully improve results for USDT or combined supply beyond funding rates. Funding and carry together explained 15.9% of weekly USDC supply-growth variation.

In the four-year issuer models, the tested factors explained 13% of USDC and 16% of USDT weekly growth variation. They included perpetual funding rates, competitor stablecoin supply, crypto-market capitalization changes, the two-year Treasury yield, Federal Reserve net-liquidity growth and the broad dollar return. No model explained more than 25% of supply-growth variation. “No model explains more than 25% of the variance in stablecoin growth,” said Cooper Duschang, a research associate and study author.

Combined USDC and USDT supply exceeded $255 billion in 2025. As of Oct. 20, neither token had recorded month-over-month supply growth above 10% in 2026.