Stablecoins are currently the largest application in the Crypto market or blockchain.

According to data from DefiLlama, the market value of stablecoins reached a new all-time high last week, with a total market value exceeding 234.6 billion US dollars. Compared to the low point of 124 billion US dollars in August 2023, this represents an almost doubled increase. Currently, USDT still leads the stablecoin market with a market share exceeding 62%.

In the meantime, the total market value of Crypto has almost mirrored the trend of stablecoins over the past two years, doubling from about 2 trillion US dollars in mid-2023 to around 4 trillion US dollars. However, the peak occurred in December last year. It has since dropped to around 2.8 trillion, a decline of about 30%, which diverges from the growth in the market value of stablecoins.

This raises an interesting question: Why is it that the market value of stablecoins keeps growing, yet the total market value of the Crypto market continues to fall?

As can be seen from the chart below, which shows the changes in the total market value of stablecoins and the market value of BTC, the trends of the two were almost identical before December last year. An increase in BTC was often accompanied by a rise in the market value of stablecoins, and a decline in BTC would also affect the market value of stablecoins, albeit with different magnitudes of fluctuation.

Statistics show that during the 2020-2021 bull market, the issuance of USDT was strongly positively correlated with the price of BTC, with a correlation coefficient exceeding 0.85, which also confirms this trend.

The current trend seems to match the trend of stablecoins and BTC in early 2022, when there was also a period during which the market value of stablecoins increased in size, but BTC pulled back instead. However, the author believes that this time the change in stablecoins may be different from that time.

Firstly, regarding the reasons for the separation of stablecoin and BTC price changes, the new funds in this cycle have not directly flowed into the BTC spot market on a large scale. Data shows that in March 2025, the open interest in derivatives remained at a high level of 54 billion US dollars, while the net inflow of spot stablecoins into exchanges was relatively weak. This means that a large number of stablecoins are being used for leveraged trading (such as futures, perpetual contracts) rather than actual coin holding needs, and even more have become a kind of hedging tool.

Secondly, compared to a few years ago when the use of stablecoins was mainly concentrated in the single Crypto market, at present, stablecoins have gone beyond the Crypto industry itself and begun to "move from virtual to real."

According to survey data from Visa, in emerging markets, about 47% of users use stablecoins for US dollar savings, 43% for better currency exchange, and nearly 40% of users use stablecoins for actual payments (goods, cross-border remittances, or salary payments). In countries such as Turkey and Egypt, where the inflation rate exceeds 50%, the number of stablecoin holders has increased by 400% year-on-year, becoming the core choice for residents to preserve value.

Electronic payment giants like PayPal have integrated their stablecoin PYUSD into over 1 million merchants, including eBay and Shopify, with transaction volumes exceeding 1.2 billion US dollars in the first quarter of 2025. According to BlackRock's forecast, the stablecoin market size will reach 2.8 trillion US dollars by 2028, penetrating 5% of global cross-border payments and 15% of the gig economy.

Therefore, the current expansion of the stablecoin market is not only due to the growth in the market value of the Crypto market but also due to the expansion of its application scale itself, so the former correlation begins to weaken numerically. So, what data of stablecoins should we pay attention to from the current market situation?

The author believes that we should pay more attention to the data changes of stablecoins flowing into major exchanges. Historically, surges in stablecoin inflows have coincided with local tops or bottoms, usually indicating increased volatility. The most recent surge exceeded 92.5 billion US dollars, one of the highest inflow levels ever.

Despite the significant fluctuations in the Crypto market, the ups and downs are bringing more changes, and these changes are also pushing the industry forward. Although not perfectly in line with price changes.

As reported in an interesting news story last week, according to the Financial Times, citing informed sources, asset management giant Fidelity Investments is advancing the issuance of its own stablecoin, which is currently in the late stages of testing. It can be seen that more and more traditional financial giants are joining the stablecoin competition.

We have to admit that stablecoins are currently the largest application in the Crypto market or blockchain, but the value changes and carrying brought by this underlying application may quietly change something. After all, it is also an expansion of Web3 users, but it has not yet brought about a real qualitative change.

As for whether the Crypto market will eventually benefit from the expansion of the stablecoin market size, there is an old saying, "Since you are here, don't be polite." Geese leave a sound when they fly over, and the wind leaves a trace. Some feathers will always be plucked.