Key Takeaways
Stablecoin supply has more than doubled in under 24 months. How is this L1 stablecoin supply gap shaping price divergence?
One landmark bill, major market share grabs, and domestic launches pegged to local currencies later, it’s no shock: Stablecoin supply has more than doubled in under two years.
Since January ’24, circulating supply has jumped from $130 billion to $270 billion. In fact, the top four issuers now control 96% of the market.
Tether [USDT] remained the liquidity anchor, while Circle [USDC], Ethena [ENA], and Sky [SKY] captured the rest.
However, now the narrative is shifting: L1s are racing to capture these stablecoin flows. Consequently, could this be the driver behind the recent L1 price divergences?
Stablecoin surge sparks L1 competition
Stablecoin supply has surged across blockchains since 2018, driving a clear divergence in L1 dominance.
Notably, Ethereum [ETH] and Tron [TRX] lead the pack, together controlling 90% of total supply, while Solana [SOL] has crossed the $10 billion threshold, securing the third spot in stablecoin adoption.
Meanwhile, smaller chains and Layer-2s like BNB Chain, Avalanche, Arbitrum One, Base, and zkSync Era are scaling steadily, gradually capturing incremental stablecoin flows.
Source: Token Terminal
All in all, L1s are clearly competing for stablecoin capital. The logic is simple: This widening L1 stablecoin gap is shaping how money flows, and ultimately, influencing price discovery.
Higher market share means more liquidity staying on-network, fueling DeFi activity, staking flows, and transaction demand, which can push prices higher as bid-side pressure accumulates.
According to AMBCrypto, examining cross-chain price divergences would provide a clear validation of this thesis.
Tracking capital flows and price impact
On-chain, stablecoin dominance is clearly aligning with technicals.
Tron [TRX], for example, has absorbed nearly $20 billion in stablecoins this year, pushing total supply to a record $82 billion. The impact? TRX is up almost 80% to $0.36, riding nine consecutive green weeks.
By contrast, Solana [SOL] has added roughly $8 billion in network stablecoins, but is still down 2% from its $213 yearly open.
Source: Token Terminal
Ethereum [ETH], meanwhile, is clearly outperforming the rest.
As the chart shows, the network has onboarded nearly $30 billion in stablecoins. Interestingly, almost 90% of this inflow has occurred since May, coinciding with ETH’s 150%+ rally off its $1,800 Q2 base.
In short, this divergence shows stablecoin inflows translating unevenly into price action. With 90% of supply concentrated in two networks, the L1s dominating liquidity are clearly driving the biggest price moves.
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