Stablecoin Market Cap Surpasses $200B, Set to Double by 2025 with Boost in Adoption

Bitwise predicts stablecoin market will surge to $400 billion by 2025, fueled by U.S. regulatory clarity, fintech integration, and global remittance demand.

The stablecoin market has reached a significant milestone, crossing the $200 billion mark for the first time as both demand and adoption continue to accelerate. This surge in market capitalization comes as stablecoins play a critical role in the cryptocurrency ecosystem, serving as the primary source of liquidity and facilitating cross-border value transfer on blockchain networks.

In just two weeks, the stablecoin market added $10 billion in value, surpassing the $190 billion threshold set during the 2022 bull market, according to data from CCData and DefiLlama. Stablecoins, which are pegged to the U.S. dollar, have become a vital part of the cryptocurrency infrastructure, driving liquidity for trading on exchanges and enabling fast, low-cost transfers.

The demand for stablecoins has risen steadily over the past year as the crypto market recovered from the bearish conditions. This growth was further accelerated after the U.S. presidential election, with a surge of $30 billion in new supply as investors flocked back into the crypto space.

Tether’s USDT, the most widely used stablecoin, reached an all-time high of $139 billion in circulation, reflecting a 12% increase over the last month, according to DefiLlama. This week, USDT was also recognized by the Abu Dhabi Global Market (ADGM), signaling its increasing acceptance in the Middle East. Circle’s USDC, the second-largest stablecoin, also experienced robust growth, increasing by 9% to a market cap nearing $41 billion. Additionally, Circle formed a strategic partnership with Binance to further expand the adoption of USDC globally.

While the growing crypto market has certainly played a role in the expansion of stablecoins, it’s not the only factor driving growth.

There’s increasing adoption of stablecoins for real-world applications, such as payments, remittances, and savings, particularly in regions with unstable local currencies and weak financial systems. Nik Milanovic, a partner at Fintech Fund, pointed out the growing number of transactions involving stablecoins on peer-to-peer payment platforms, a key sign of adoption outside the traditional crypto market.

Tokenized stablecoins that offer yield to investors are also becoming popular. For example, Ethena’s USDe token, which generates yield by shorting bitcoin and ether, surged by 90% in the last month, reaching a market cap of over $5 billion, according to DefiLlama. Meanwhile, the DeFi protocol Usual saw its stablecoin grow by 100%, reaching $700 million in the same period.

Stablecoin Market Could Reach $400 Billion by 2025

Looking ahead, Bitwise predicts that the stablecoin market will continue to grow, potentially reaching $400 billion by 2025. According to Bitwise’s recent report, one of the key catalysts for this growth could be the passage of stablecoin legislation in the U.S., which would provide regulatory clarity and set the framework for stablecoin businesses and issuers.

“Once the regulatory questions—such as who will regulate stablecoins and the proper reserve requirements—are resolved, it will spark a wave of interest from both issuers and consumers,” Bitwise analysts stated. “We expect major traditional financial institutions, such as J.P. Morgan, to enter the space once regulations are clear.”

The growth of stablecoins will also be driven by their integration into fintech platforms, following PayPal’s launch of its PYUSD stablecoin, and the increasing role they play in global payments and remittances, according to Bitwise.

Other financial institutions share similar bullish projections. Standard Chartered and Zodia Markets have forecasted that stablecoins could eventually account for 10% of the U.S. money supply and foreign exchange transactions, up from just 1% today.

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