With the increasing demand and adoption of stablecoins, the total market capitalization of stablecoins surpassed $200 billion for the first time on Wednesday. According to data from CCData and DefiLlama, stablecoins have gained $10 billion in market value within just two weeks since breaking the $190 billion record set during the bull market cycle of 2022.
Source: CCData
As the cryptocurrency market emerges from a bear market, the demand for stablecoins has steadily grown over the past year. The growth rate of stablecoins significantly accelerated after Donald Trump, who supports cryptocurrencies, won the presidential election last month, with the supply increasing by nearly $30 billion since November 6.
Data from DefiLlama shows that the largest stablecoin by market capitalization is Tether’s USDT, which has reached a record supply of around $140 billion, growing by approximately 12% in the past month. On December 10, Tether announced that the Financial Services Regulatory Authority (FSRA) of Abu Dhabi has accepted USDT as an “Accepted Virtual Asset” (AVA) for the Abu Dhabi Global Market (ADGM).
The second largest stablecoin by market capitalization is USDC, issued by Circle, which has also grown by about 12% in the past month, reaching approximately $41.6 billion. Circle recently established a new strategic partnership with the cryptocurrency exchange Binance to promote the adoption of USDC globally.
The growth of stablecoins is also driven by practical use cases such as payments and savings. In addition to the growth in the cryptocurrency market, stablecoins have gained traction in real-world applications. A report published in September this year showed an increasing use of stablecoins in payment, remittance, and savings, particularly in developing countries with rapidly depreciating local currencies and fragile financial systems.
Nik Milanovic, a partner at the venture capital firm Fintech Fund, pointed out that one sign of stablecoin adoption in non-crypto applications is the rapid growth in stablecoin transactions on transfer apps, including peer-to-peer payment platforms.
Source: Nik Milanovic
Tokens that offer price stability and yield for investors are also gaining popularity. According to DefiLlama, the market capitalization of USDe, issued by the stablecoin protocol Ethena, has grown by nearly 88% in a month to reach $5.6 billion, making it the third largest stablecoin. The emerging decentralized finance (DeFi) protocol Usual’s stablecoin USD0 has climbed to $790 million, doubling its size within the same period.
Bitwise predicts that the market capitalization of stablecoins will double next year
In a report released on Tuesday, digital asset management company Bitwise predicted that the market size of stablecoins will reach $400 billion by 2025, with one key catalyst potentially being the long-awaited stablecoin legislation passed by the US Congress to define rules for the issuance and interaction of stablecoins by companies and institutions.
The report also added that other growth catalysts include popular fintech applications integrating stablecoins into their services, similar to PayPal’s PYUSD stablecoin, and the increasingly important role of stablecoins in global payments and remittances.
Not only Bitwise, but Standard Chartered Bank and its digital asset brokerage Zodia Markets also predicted in a report last month that the adoption of stablecoins will significantly increase, possibly accounting for 10% of US M2 transactions in the future. Data source: