Stablecoin balances across exchanges surged to an annual peak of $41 billion this week, marking a significant uptick in liquidity within the cryptocurrency market. This increase in supply reflects the growing investment appetite following the U.S. election, with traders moving capital into the digital asset space.

The top two stablecoins, Tether’s USDT and Circle’s USDC, collectively saw their supply grow by over $5 billion since November 5, as per TradingView data. USDT saw a rise of $3.8 billion, pushing its total supply to a record high of $124 billion, while USDC’s supply increased by $1.6 billion, reaching nearly $37 billion.

This expansion in stablecoin supply is often considered a bullish sign for the crypto market. Stablecoins, pegged to the U.S. dollar, provide a stable store of value and are commonly used to facilitate trading and liquidity in the cryptocurrency ecosystem. USDT is the primary stablecoin on offshore exchanges, while USDC is heavily used on U.S.-based exchanges like Coinbase and in decentralized finance (DeFi) applications.

David Shuttleworth, partner at Anagram, explained that a significant amount of capital had been on the sidelines in anticipation of the election results. Once the results were known, buy-side pressure increased, contributing to the growth in stablecoin balances.

Another key development was the rise in Ethereum-based stablecoins on exchanges. Ahead of the election, exchange balances of stablecoins had been steadily declining, as investors took a wait-and-see approach. However, following November 5, stablecoin balances surged to $41 billion, up from around $36 billion in early November, according to on-chain data from Nansen.

The rise in stablecoin supply has coincided with a surge in market activity. Bitcoin’s price hit new highs following Donald Trump’s election victory, and optimism for a crypto-friendly regime in the U.S. has sparked renewed interest in digital assets.

Additionally, stablecoin growth was evident across other blockchains. USDC’s supply on the Solana network increased by 14% in the past week, reaching $2.9 billion, fueled by a resurgence in DeFi activity. USDT also saw growth on the TON blockchain, reaching a new record of $1.1 billion, a 10% increase, as Telegram’s blockchain ecosystem continues to attract experimentation.