Despite a broader market downturn, the stablecoin sector saw explosive growth in the first quarter of 2025. According to a recent report from IntoTheBlock, the total stablecoin supply surged by over $30 billion, reaching new all-time highs, even as the overall crypto market cap fell by 19%.
[TECH] STABLECOINS | ‘We Have 400 Million Users in Emerging Markets – We’re Basically Pushing Dollar Hegemony, Selling U.S Debt Outside the U.S,’ Says Tether CEO: Tether is currently the 17th largest.. https://t.co/B9NgyF7CeK via @BitcoinKE
— Top Kenyan Blogs (@Blogs_Kenya) March 9, 2025
This dramatic influx signals a cautious shift in investor behavior, with many opting to park funds in stablecoins amid rising macroeconomic uncertainty – including growing concerns over U.S. tariffs.
“The correlation between crypto and equities has tightened, as investor sentiment moved swiftly from post-halving optimism to fears of a tariff-driven slowdown,” IntoTheBlock noted in its Q1 2025 report.
Stablecoins Signal Bullish Potential, Despite Market Jitters
Juan Pellicer, a senior research analyst at IntoTheBlock, emphasized that the spike in stablecoin supply reflects a strategic retreat, not a full exit from the market.
“It’s a cautious stance. Investors are holding stablecoins as a hedge, likely waiting for better entry points or greater market stability,” he said.
Industry leaders see this growth not just as a defensive move, but potentially as a precursor to another leg up for crypto markets.
Indeed, stablecoin supply surpassed its previous all-time high of $219 billion in mid-March 2025, a metric some analysts interpret as a bullish indicator for the continuation of the current crypto cycle.
REPORT | StableCoins Now Account for 1% of Total U.S. Dollar Supply, Transfer Volume Eclipsed VISA and MasterCard Combined in 2024
Tether’s $USDT, the world’s largest stablecoin by market cap, accounted for ~79.7% of stablecoin trading volumehttps://t.co/DRODNTKQr1 @Tether_to pic.twitter.com/CnyfdE45oE
— BitKE (@BitcoinKE) February 4, 2025
Ethereum at the Heart of Stablecoin Activity
Ethereum remains the epicenter of stablecoin usage, processing over $3 trillion in stablecoin transactions on its mainnet in Q1 2025 alone. Additionally, the number of unique stablecoin addresses on Ethereum crossed the 200,000 mark for the first time in March 2025, another all-time high.
EXPLAINER | How to Send Stablecoins From One Blockchain to Another Without Losing Your Money
Think about this:
If you have your money in $USDT on #Ethereum Blockchain and you wish to do a transaction on #TRON Blockchain, sending your money becomes a problem.
Learn how to… pic.twitter.com/VidMuzU7Pl
— BitKE (@BitcoinKE) March 30, 2025
Yet, despite this spike in on-chain activity, Ether (ETH) saw a steep 45% price drop over the same period. Market watchers attribute the decline to both broader economic concerns and Ethereum-specific pressures—such as rising competition from alternative layer-1 chains like Solana, and the growing adoption of layer-2 networks.
“There’s debate about whether layer-2s dilute Ethereum’s value by moving activity off the main chain. But it’s important to note that these L2s still pay fees and rely on Ethereum’s security,” says one analyst.
“The bigger issue is uncertainty around how Ethereum captures long-term value from its ecosystem.”
Despite the downward price pressure, some analysts remain optimistic. A recent outlook from Nansen suggests a 70% probability that crypto markets will find a bottom by June 2025, as tariff negotiations play out and investor sentiment stabilizes.
Join and interact with our Telegram community
___________________________________________
___________________________________________
