Bitwise anticipates stablecoin market will reach $400 billion by 2025, spurred by U.S. regulations, fintech adoption, and global remittance growth.

The stablecoin market has reached a new milestone, surpassing $200 billion in total market capitalization for the first time, reflecting a surge in both demand and adoption across the sector.

In the last two weeks, the market cap of stablecoins grew by $10 billion, surpassing the previous high of $190 billion set during the 2022 bull market, as reported by CCData and DefiLlama. Stablecoins, which are typically pegged to the U.S. dollar, have become essential infrastructure in the cryptocurrency ecosystem, providing liquidity for crypto trading on exchanges and facilitating value transfer across blockchain networks.

The demand for stablecoins has steadily risen as the cryptocurrency market rebounded from the previous bear market. The growth took a sharp uptick following Donald Trump’s election victory, injecting $30 billion into the market as investors rushed to place their funds into crypto assets.

Tether’s USDT, the leading stablecoin, has risen to a new high of $139 billion in supply, a 12% increase in just one month, according to DefiLlama. This week, USDT also received recognition from the Abu Dhabi Global Market (ADGM), signaling its expansion into the Middle Eastern market. Similarly, Circle’s USDC, the second-largest stablecoin, saw a 9% increase, reaching a market value of nearly $41 billion. Circle also partnered with Binance, the world’s largest crypto exchange, to further drive global adoption of USDC.

However, the stablecoin boom is not limited to cryptocurrency growth alone.

There is increasing evidence of stablecoin adoption in non-crypto applications, such as payments, remittances, and savings. This is particularly evident in developing regions where local currencies are rapidly depreciating, and financial systems are fragile. Milanovic, a partner at Fintech Fund, highlighted the growing volume of stablecoin transactions on peer-to-peer payment platforms, demonstrating the rise in adoption for these use cases.

In addition to these trends, tokenized products linked to stablecoins that offer yield to investors are also gaining traction. For example, Ethena’s USDe token, which generates yield through shorting Bitcoin and Ethereum perpetuals, surged by 90% in the past month to a market value of over $5 billion, as per DefiLlama data. Similarly, Usual, a decentralized finance (DeFi) protocol, saw its stablecoin’s value double to $700 million during the same period.

Stablecoin Market Could Reach $400 Billion by 2025

According to digital asset manager Bitwise, the stablecoin market is on track to double in size, reaching $400 billion by 2025. The driving factors include the potential passage of long-awaited U.S. legislation that will provide regulatory clarity and structure for stablecoin businesses and institutions.

“Clear regulatory answers—such as who regulates stablecoins and what reserve requirements will apply—will spark a massive surge in interest from issuers, consumers, and businesses,” wrote Bitwise analysts in their report. “We expect traditional financial institutions, such as J.P. Morgan, to enter the stablecoin space once regulations are clear.”

Moreover, the adoption of stablecoins in fintech applications, following PayPal’s introduction of its PYUSD stablecoin, and their increasing role in facilitating global payments and remittances, are seen as further drivers of growth, according to Bitwise.

These projections align with a recent forecast from Standard Chartered and Zodia Markets, which estimated that stablecoins could account for up to 10% of U.S. money supply and foreign exchange transactions, up from the current 1%.