Monthly Ethereum stablecoin volume hits record $2.8 trillion in October

The total monthly stablecoin volume on Ethereum soared to hit a new all-time high in October, as traders increasingly sought yield opportunities during the crypto market slowdown.

According to The Block's data, stablecoins on Ethereum saw a total of $2.82 trillion in onchain volume in October, surpassing the previous all-time high of $1.94 trillion set in September. This marks a 45% monthly growth.

Circle's USDC took the lead with $1.62 trillion in monthly volume, followed by USDT, which had a volume of $895.5 billion last month. Both stablecoins saw an increase in volume from the previous month.

Meanwhile, MakerDAO's DAI stablecoin ranked third with $136 billion, down from $141.2 billion in September and significantly lower than May's $470.7 billion.

"Stablecoins have been one of the hottest sectors over the past couple of months following the Circle IPO and the passage of the Genius Act," said Min Jung, research associate at Presto Research. "Yield farming, especially around 'liquid yield tokens,' has been highly active, and new stablecoins with innovative concepts are attracting users seeking yield."

Stablecoin volume rose last month as the crypto market retreated from its record-setting bull run toward more modest pricing. Bitcoin is down 11.5% in the past month to $108,229, while Ethereum is down 16.4% to $3,754.

Kronos Research CIO Vincent Liu noted that stablecoin volume surge indicates that traders were actively managing liquidity, preparing to buy price dips amid ongoing profit-taking in major cryptocurrencies.

"They're staging capital to rotate between emerging narratives, using stablecoins as a hedge and a yield-generating tool until deployment," Liu said.

The surge in volume positioned stablecoin issuers as the dominant revenue generators among crypto protocols, data shows.

Stablecoin issuers consistently managed around 65% to 70% of total daily revenue across major crypto protocol categories throughout October, beating others including lending platforms, decentralized exchanges, collateralized debt positions, and blockchain infrastructure.

Major issuers Tether and Circle base their earnings on the assets that back their stablecoins. They hold user deposits in relatively low-risk instruments like U.S. Treasuries and keep the accrued interest, making yield on reserves their core profit source.

"[October's] volume underscores a maturing crypto market, where stablecoin activity has grown for non-speculative use cases like payments and cross-border transactions," said Nick Ruck, director at LVRG Research.