Bitwise forecasts stablecoin market will reach $400 billion by 2025, driven by regulatory clarity, fintech integration, and global adoption.
The stablecoin market has hit a major milestone, surpassing $200 billion in total market cap, as demand for stablecoins continues to rise alongside their adoption across various industries. In just two weeks, the market cap grew by $10 billion, marking a significant leap from the previous record of $190 billion set during the 2022 bull market, according to data from CCData and DefiLlama. Stablecoins, typically pegged to the U.S. dollar, have become essential in the crypto world, facilitating liquidity on exchanges and providing a stable means of value transfer across blockchain networks.
This growth follows the crypto market’s recovery from the prolonged bear market, with demand for stablecoins accelerating after the recent U.S. elections. In response, Tether’s USDT, the dominant stablecoin, saw its supply reach a record $139 billion, representing a 12% month-over-month increase. USDT was also granted recognition by the Abu Dhabi Global Market (ADGM) this week, further expanding its reach in the Middle East. Circle’s USDC, the second-largest stablecoin, grew 9%, reaching a nearly $41 billion market cap, as Circle partnered with Binance to boost USDC adoption globally.
However, the expansion of stablecoins is not solely driven by the growth of the crypto market.
Stablecoins are also gaining traction in non-crypto sectors, including payments, remittances, and savings, particularly in regions with unstable local currencies or underdeveloped financial systems. According to Nik Milanovic, partner at Fintech Fund, the number of stablecoin transactions on peer-to-peer payment platforms has been growing rapidly, reflecting increased use in everyday financial activities.
Moreover, stablecoins linked to decentralized finance (DeFi) protocols are gaining popularity. For example, Ethena’s USDe token, which generates yield through the shorting of bitcoin and ether, has surged by 90% in the last month, reaching a $5 billion market cap, according to DefiLlama data. Similarly, the DeFi protocol Usual’s stablecoin grew by 100% to $700 million during the same period.
Stablecoin Market Likely to Reach $400 Billion in 2025
Bitwise Asset Management predicts that the stablecoin market will continue its upward trajectory, potentially reaching $400 billion by 2025. According to Bitwise’s latest report, a key driver of this growth could be the passage of stablecoin-specific legislation in the U.S., which would provide regulatory clarity for businesses and issuers operating in the space.
“The resolution of regulatory questions, such as which authorities will oversee stablecoins and what the reserve requirements will be, will attract significant interest from issuers, businesses, and consumers,” said Bitwise analysts. “We expect large, traditional financial institutions, such as J.P. Morgan, to enter the space once the regulatory environment is clear.”
Additionally, the adoption of stablecoins by popular fintech platforms, following PayPal’s introduction of its PYUSD stablecoin, and their increasing use in global remittances and payments will likely fuel further growth, Bitwise added.
Similar forecasts are shared by other financial institutions, with Standard Chartered and Zodia Markets projecting that stablecoins could eventually make up 10% of the U.S. money supply and foreign exchange transactions, a significant increase from their current 1% share.
