Global Stablecoin Supply Could Hit $1 Trillion by 2025, Boosting Crypto Growth

David Pakman, managing partner at the crypto investment firm CoinFund, has predicted that the total supply of stablecoins could skyrocket to $1 trillion by the close of 2025, potentially fueling the growth of the broader cryptocurrency market.

In a recent discussion, Pakman highlighted that the supply of stablecoins could rise dramatically in 2025, going from $225 billion to $1 trillion within the year, marking a substantial change in the blockchain finance space, even though it would still be small in comparison to global financial markets.

Pakman also discussed how the rising capital flowing onto blockchain platforms, coupled with the increasing interest in exchange-traded funds (ETFs), could provide a significant boost to decentralized finance (DeFi).

He suggested that if ETFs were to offer staking rewards or yield to holders, it would trigger a notable increase in DeFi activities. Stablecoins, which had reached a high of $208 billion in supply across the five largest coins by March 28, have shown consistent growth. Pakman noted that this expanding stablecoin supply is a crucial development that could bring in more participants to the blockchain ecosystem.

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The stablecoin market continues to grow, recently surpassing $219 billion, a trend that analysts from IntoTheBlock believe indicates the market is still in the middle of its cycle rather than nearing its peak. As stablecoins are increasingly adopted for daily transactions, the volume of stablecoin payments has surged more than 22 times since 2021.

Pakman noted that this growth is marked by a decrease in the size of individual stablecoin transactions, signaling that they are now used more for everyday payments rather than large transfers. However, despite this growth, experts like CryptoQuant’s CEO Ki Young Ju argue that stablecoins alone won’t drive Bitcoin’s price up without further market catalysts.

Alexander Stefanov