Stablecoin Market Cap Hits $200B Milestone, Could See Growth of 100% by 2025 with Accelerated Adoption

Bitwise forecasts stablecoin market to hit $400 billion by 2025, driven by U.S. legislation, fintech adoption, and global payments.

The stablecoin market has achieved another major milestone, surpassing $200 billion in total market value for the first time, as growing demand and adoption continue to shape the sector.

In just two weeks, the market value of stablecoins increased by $10 billion, surpassing the previous high of $190 billion set during the 2022 bull cycle, according to data from CCData and DefiLlama. Stablecoins, which are pegged to the U.S. dollar, provide stability in the volatile cryptocurrency market. They play a crucial role as a primary liquidity source on exchanges and enable the seamless transfer of value across blockchain networks.

The demand for stablecoins has steadily increased as the cryptocurrency market has recovered from its previous downturn. The growth accelerated significantly after Donald Trump’s election victory, adding $30 billion in supply as investors flocked back to crypto assets.

Tether’s USDT, the leading stablecoin, reached an all-time high supply of $139 billion, growing by 12% in just one month, according to DefiLlama data. USDT was also recognized by the Abu Dhabi Global Market (ADGM) this week, opening the door for the stablecoin’s expansion in the Middle East. Circle’s USDC, the second-largest stablecoin, grew by 9%, reaching nearly $41 billion in market value during the same period. Additionally, Circle recently partnered with Binance, the world’s largest crypto exchange by trading volume, to boost USDC adoption globally.

But the growth of stablecoins is not just being driven by the cryptocurrency market.

There is growing evidence that stablecoins are being used for payments, remittances, and savings, particularly in developing countries with unstable currencies and fragile financial systems. Nik Milanovic, partner at Fintech Fund, pointed out in an X post that the number of stablecoin transactions on peer-to-peer payment platforms has been rapidly increasing.

Another trend contributing to the stablecoin market’s expansion is the rise of tokenized products that offer yields. For example, Ethena’s USDe token, which generates yield by shorting bitcoin and ether perpetuals, surged by 90% in just a month, reaching a value of over $5 billion, according to DefiLlama. Similarly, Usual, a decentralized finance (DeFi) protocol, saw its stablecoin grow to $700 million in value, doubling in size over the same period.

The Stablecoin Market May Double by 2025

Bitwise, a digital asset manager, expects the stablecoin market to grow to $400 billion by 2025. The key drivers for this growth include the potential passage of U.S. stablecoin legislation, which will define the rules for businesses and institutions dealing with stablecoins.

“Clear regulatory answers—such as who will regulate stablecoins and the proper reserve requirements—will attract massive new interest from issuers, consumers, and businesses,” wrote Bitwise analysts in their report. “Once this happens, traditional banks like J.P. Morgan are likely to enter the space.”

In addition to regulation, other growth factors include the integration of stablecoins into popular fintech applications, as demonstrated by PayPal’s launch of its PYUSD stablecoin, and the increasing role of stablecoins in global payments and remittances.

Bitwise’s projections are in line with a recent report from Standard Chartered and Zodia Markets, which suggested that stablecoins could eventually account for 10% of U.S. money supply and foreign exchange transactions, a significant rise from the current 1%.