Amberdata 2025: Q1 Stablecoin Market Intelligence Report

Explore the technical drivers of Q1 2025’s stablecoin market, from issuance fluctuations and transaction velocity to regulatory impacts on liquidity and market structure. Amberdata’s analytics break down how these factors influence systemic risk, trading behavior, and institutional adoption.

Introduction

Welcome to Amberdata’s Q1 2025 Stablecoin Market Intelligence Report—a quarter shaped by evolving regulatory environments, strategic integrations, and shifts in institutional and retail adoption patterns. Early 2025 saw notable developments, from the U.S. executive order formally endorsing stablecoins as key financial instruments to regulatory-driven changes under Europe’s MiCA framework prompting major exchange delistings. This period highlighted the dynamic roles stablecoins play as both stabilizers during volatility and potential sources of systemic risk, reflected clearly in fluctuating issuance trends and transaction velocities across different stablecoin types.

At Amberdata, we provide comprehensive analytics on stablecoin dynamics, offering insights into market capitalization changes, issuance patterns, transfer volumes, and liquidity flows across leading stablecoins such as USDT, USDC, DAI, and emerging players like PYUSD. By combining detailed on-chain data with broader market intelligence, our platform enables traders, institutions, and analysts to clearly interpret how shifts in stablecoin usage—ranging from institutional-scale FDUSD transactions to increasing retail adoption of PayPal’s PYUSD—influence broader crypto market liquidity and risk. Whether evaluating systemic stability through issuance fluctuations, examining velocity patterns for trading insights, or tracking regulatory impacts on stablecoin adoption, Amberdata’s analytics provide the critical tools needed to strategically navigate stablecoin markets with confidence.

The Importance of Comprehensive Data

Comprehensive, real-time data is essential for effectively navigating the crypto market, particularly given its volatility and rapid evolution. Insights into Bitcoin and Ethereum metrics, such as UTXO age distributions, holder accumulation patterns, and open interest trends, help investors and traders accurately assess market sentiment and underlying network strength. Additionally, stablecoin activity—including issuance trends, transaction volumes, and velocity metrics—can provide early signals about liquidity shifts and investor risk appetite.

Exchange-specific data, such as spot and derivatives volumes, funding rates, and long-short ratios, further enrich this analytical framework, offering crucial visibility into market positioning and potential leverage risks. Amberdata equips institutions and traders with these critical insights, enabling precise risk management and informed investment decisions. For more detailed research and analysis, visit our research blog. To explore how Amberdata can support your market strategies, contact us or request a demo.

Stablecoins

As measured on the Ethereum Network, stablecoins demonstrated resilience and adaptability amid shifting regulatory environments and market volatility. Tether (USDT), despite regulatory pressures like Europe’s MiCA legislation, slightly reduced its market cap from approximately $77.2 billion to around $74.4 billion. Conversely, USDC on the Ethereum Network saw significant growth, rising from about $34.5 billion to nearly $39.7 billion, bolstered by regulatory compliance and increased traditional finance integrations. PayPal’s PYUSD notably expanded rapidly, increasing from approximately $399 million to around $775 million, driven by growing institutional and retail adoption. Decentralized stablecoins such as MakerDAO’s DAI modestly declined from $3.55 billion to roughly $3.18 billion, reflecting cautious investor sentiment amid ongoing DeFi evolution. Stablecoin transfers varied significantly; FDUSD recorded notably large average transactions (~$2 million each), highlighting institutional-scale use cases. These dynamics underscored investor preferences shifting toward regulated, transparently backed stablecoins amidst persistent market uncertainty.

News and events

From January through mid-April 2025, the stablecoin landscape experienced significant developments, shaped by impactful regulatory changes, high-profile integrations, and notable incidents affecting market confidence and adoption.

Early in 2025, stablecoins received strong backing from the highest levels of the U.S. government. On January 23, 2025, the newly inaugurated U.S. President issued an executive order explicitly promoting stablecoins as a legitimate and essential component of the global financial infrastructure. Crucially, this order halted federal efforts towards developing a U.S. central bank digital currency (CBDC), directing instead that regulatory agencies actively support lawful, fiat-backed stablecoins. The order marked a dramatic shift toward a more crypto-friendly stance, significantly boosting market confidence in stablecoins as institutional-grade financial instruments.

Shortly after, on January 30, 2025, Tether (USDT), the world's largest stablecoin, expanded onto the Bitcoin blockchain through integration with the Bitcoin and Lightning Networks. Enabled by Lightning Labs’ innovative Taproot Assets protocol, USDT became available for direct issuance on Bitcoin's base layer, allowing near-instantaneous and cost-efficient transfers. This technical advancement opened new possibilities for stablecoin usage in Bitcoin-based payments and remittances, expanding Tether’s already substantial market presence beyond Ethereum, Tron, and other smart contract platforms.

However, confidence in stablecoin-related financial services experienced a notable setback in February. On February 24, 2025, the Hong Kong-based stablecoin neobank Infini was subjected to a major on-chain exploit. A hacker managed to drain approximately $49.5 million worth of stablecoin deposits, severely undermining user trust. Although major stablecoins themselves did not depeg, this incident highlighted persistent vulnerabilities within decentralized finance (DeFi) and stablecoin yield-generation platforms, prompting heightened caution among users and investors regarding platform-specific risks.

Regulatory pressures intensified significantly in March, particularly affecting European markets. On March 3, 2025, Binance, the world’s largest cryptocurrency exchange, announced plans to delist multiple prominent stablecoins—including Tether (USDT), TrueUSD (TUSD), Pax Dollar (USDP), Dai (DAI), and First Digital USD (FDUSD)—in response to the EU's new Markets in Crypto-Assets (MiCA) regulation. Binance instructed European users to convert holdings into MiCA-compliant stablecoins, notably Circle’s USDC. This rapid regulatory adjustment provoked substantial market shifts, creating volatility and reinforcing the growing preference among institutions and traders for regulatory-aligned stablecoins.

Later that month, stablecoin markets received significant attention when U.S. President Donald Trump’s crypto-focused enterprise, World Liberty Financial, announced plans on March 25, 2025, to launch a new fiat-backed stablecoin named USD1. Backed by over $550 million in capital raised through token sales, USD1 would be fully reserved with cash, U.S. Treasuries, and cash equivalents. The introduction of USD1 underscored the growing institutional appetite and competition in the stablecoin market, especially in a regulatory environment increasingly favorable to fiat-backed stablecoins.

Legislative support for stablecoins advanced further in the U.S. with the introduction of the Stablecoin Act on March 26, 2025. This bill proposed clear federal oversight for payment stablecoins, notably including provisions allowing stablecoin issuers to pay interest—previously restricted due to banking concerns. Market participants viewed this development positively, anticipating that regulatory clarity would further legitimize and expand the stablecoin sector.

In parallel, stablecoin issuer Circle secured a significant institutional milestone. On March 27, 2025, Circle entered a partnership with the Intercontinental Exchange (ICE)—operator of the New York Stock Exchange—to integrate its USDC and a new yield-focused stablecoin, US Yield Coin (USYC), into traditional financial market infrastructure. This collaboration indicated a pivotal step toward broader mainstream acceptance, reinforcing stablecoins as critical tools for settlement and trading within legacy financial markets.

Despite these advances, market confidence faced a serious test on March 31, 2025, when First Digital USD (FDUSD) sharply depegged amid rumors regarding its issuer’s solvency. FDUSD fell to approximately $0.76 before partially recovering to $0.97. Triggered by concerns over asset liquidity and public allegations by influential market figures, the incident underscored the continued risks associated with transparency and reserves management in fiat-backed stablecoins, prompting traders to shift toward more established and transparent stablecoins.

Ethereum Network Stablecoin Market Capitalization

From January to April 2025, the stablecoin market on Ethereum showed significant movements reflecting broader industry trends and regulatory shifts. Tether (USDT) remains dominant, though its market cap slightly decreased from $77.2B to $74.4B, likely due to regulatory pressures, particularly Europe's MiCA rules pushing some EU exchanges toward delisting USDT. Conversely, USDC continued its strong growth, increasing from $34.5B to nearly $39.7B, boosted by Circle's proactive compliance with international regulations and integrations into traditional finance, such as Visa and Mastercard payment systems.

Decentralized stablecoins saw mixed results. MakerDAO’s DAI experienced a modest decline, down from $3.55B to $3.18B, amid its ongoing transition to USDS (Sky Protocol), signaling some uncertainty as MakerDAO heavily integrates real-world assets to stabilize yield. Liquity's LUSD also declined slightly from $59M to $44M, highlighting limited adoption despite its resilience during regulatory uncertainties.

Newer stablecoins experienced notable volatility. PayPal's PYUSD surged dramatically, increasing from $399M to $775M in just three months, reflecting accelerated adoption through PayPal’s global network and improved multi-chain accessibility. FDUSD, however, fluctuated widely, peaking at $2.3B in March before sharply declining to $1.4B by April, suggesting possible liquidity shifts or regulatory uncertainty impacting demand.

Binance's BUSD continued its phased exit, effectively becoming irrelevant with market cap shrinking below $58M due to sustained regulatory pressures. For traders and DeFi institutions, these trends emphasize the importance of regulatory clarity and issuer transparency. USDC's growth and PYUSD’s emergence signal growing institutional confidence in regulated, transparent stablecoins, while volatility in decentralized alternatives and smaller issuers suggests ongoing risk factors. Traders should closely monitor stablecoin reserves and regulatory developments as they directly impact liquidity conditions and overall market stability.

Stablecoin Issuance

From January to April 2025, stablecoin issuance—representing newly minted or redeemed tokens—provides crucial signals about market sentiment and adoption patterns. Positive issuance typically implies increasing demand or expanding use-cases, while negative issuance signals redemptions, reflecting decreased confidence or regulatory concerns.

In early 2025, USDC showed significant volatility in issuance, fluctuating notably with a net redemption of $100 million in February but rebounding strongly with new issuance of $248 million in March and $85 million in April. This pattern reflects Circle's ongoing integration with traditional finance and aggressive global compliance, positioning USDC as a reliable on-chain dollar amid regulatory uncertainties.

DAI issuance remained turbulent, with substantial redemptions (-$38 million) in February, a strong recovery ($41 million issued) in March, and modest redemption (-$6.6 million) in April. This volatility is linked to MakerDAO’s transition to its rebranded stablecoin, USDS, and strategic adjustments to its high-yield DAI Savings Rate (DSR). The fluctuating issuance underlines cautious investor sentiment amidst structural changes.

PYUSD, PayPal’s stablecoin, saw robust issuance through early 2025, issuing nearly $38 million in January alone, reflecting accelerating adoption within PayPal’s vast user base. However, issuance slowed notably in subsequent months, hinting that initial demand from new user onboarding might plateau without broader ecosystem integration.

In contrast, decentralized LUSD displayed minor negative issuance, indicating limited adoption outside niche DeFi users seeking censorship resistance. BUSD and FDUSD had consistent negative issuance, aligning with Binance’s strategic withdrawal from BUSD due to regulatory actions and reflecting FDUSD’s market uncertainty.

For institutions and DeFi traders, these issuance trends suggest continued dominance of centrally issued stablecoins (USDC, PYUSD) which are aligning proactively with global regulations and mainstream finance. Decentralized stablecoins (DAI, LUSD) remain important but face uncertainty in adoption and usage patterns, highlighting the need for ongoing risk assessment in decentralized finance strategies.

Stablecoin Monthly Total Transferred

In early 2025, stablecoin transfer volumes on Ethereum exhibited a clear upward trend, suggesting increased market activity and a revival of confidence in crypto trading and DeFi. However, the levels have yet to revisit the record peaks of July-August 2024, indicating a cautious market recovery rather than outright exuberance.

USDC maintained its market leadership, with March 2025 volumes reaching nearly $585 billion—a robust increase from $467 billion in January, yet still significantly below the $762 billion peak seen in July 2024. This steady rise suggests strong adoption driven by Circle’s proactive regulatory alignment and growing institutional integrations, positioning USDC as a preferred stablecoin for major players.

Similarly, USDT transfer volumes showed recovery momentum, reaching approximately $274 billion in March after a lower January ($273 billion), though still beneath its July 2024 high ($589 billion). This steady, albeit subdued recovery could reflect traders’ cautious approach due to Tether’s regulatory pressures, especially from Europe’s MiCA framework.

DAI’s volume rebounded sharply, from $169 billion in January to $352 billion in March, demonstrating renewed DeFi activity, supported by MakerDAO's rebranding to USDS and ongoing integrations with real-world assets. Yet, even these improved levels lag significantly behind the nearly $957 billion high recorded in August 2024, highlighting lingering investor caution amid governance and structural changes.

PYUSD showed remarkable growth, rising from approximately $1.7 billion transferred in January to $3.7 billion by March, underscoring PayPal's expanding user adoption, particularly within its payment ecosystem. Smaller stablecoins like FDUSD and LUSD saw incremental gains but remained niche players, reflecting continued market concentration among major regulated stablecoins.

Overall, stablecoin transfers indicate cautious optimism in crypto markets—traders and institutions are gradually returning, with regulatory clarity and TradFi integrations influencing preference toward compliance-friendly stablecoins, critical for sustained DeFi growth and stability in the broader crypto ecosystem.

Stablecoin Average Transfer Amount Over Q1

In Q1 2025, the average stablecoin transfer amounts on Ethereum showed significant variation, highlighting distinct usage patterns across the market.

FDUSD exhibited the highest average transfer size, around $2 million per transaction, suggesting that this newer stablecoin is primarily utilized by larger institutional players or for significant financial operations, reflecting less retail involvement but potentially higher-value trades or treasury management use-cases.

DAI also had a notably large average transaction size at approximately $812,000. This substantial figure points to DAI’s continued importance within DeFi, particularly among protocols and large-scale yield farmers, driven by MakerDAO's recent strategic shift (rebranding to USDS) and real-world asset integrations.

By contrast, market leaders USDC ($97,900) and USDT ($41,700) had smaller average transfer amounts despite vastly higher total volumes. These lower averages indicate extensive retail participation, frequent trading activity, and broader adoption among smaller institutions, exchanges, and payment platforms. USDT’s slightly smaller average compared to USDC aligns with its role as a preferred stablecoin in emerging markets, where it serves as a more accessible USD substitute for everyday transactions.

PYUSD and USDP averaged around $44,500 and $46,400 respectively, reflecting niche yet growing corporate and fintech adoption, especially within PayPal’s expanding user base. Smaller stablecoins like LUSD ($16,600), MIM ($19,400), and FEI ($10,900) demonstrated moderate average transaction sizes, likely due to targeted niche uses—LUSD’s decentralized collateral-backed model and MIM’s stablecoin leverage in DeFi ecosystems.

Overall, these average transfer sizes provide valuable insights for traders and institutions: USDC and USDT remain go-to stablecoins for liquidity and broader market participation, while FDUSD and DAI signal institutional or high-value transactional activity, each serving specialized roles within the evolving crypto and DeFi landscape.

Stablecoin Daily Average Number of Senders and Receivers by Asset

The average number of senders and receivers per stablecoin in Q1 2025 reveals significant disparities in adoption and usage patterns across different stablecoins on Ethereum.

USDT and USDC lead by a wide margin, with USDT averaging approximately 66,050 users and USDC around 28,414 users, indicating these stablecoins are deeply integrated into exchanges, DeFi platforms, and retail wallets. The sheer number of users implies broad-based, retail-driven activity and frequent use for smaller trades and transactions.

DAI, averaging ~1,697 users, maintains significant usage but on a smaller scale, likely reflecting its more specialized role in DeFi (such as yield farming and decentralized lending). PayPal’s PYUSD averages around 432 users, highlighting solid adoption growth given its recent entry, but still far from the mass scale of USDT or USDC.

Smaller stablecoins, like TUSD (~64 users) and USDP (~59 users), see limited yet consistent usage, potentially due to specific exchange partnerships or niche applications. LUSD (~71 users) maintains niche appeal in decentralized finance given its fully ETH-backed collateralization, while stablecoins such as FDUSD (~29 users), MIM (~22 users), BUSD (~107 users, declining due to regulatory issues), FEI (~9 users), and HUSD (~2 users) show notably lower engagement, indicative of limited market confidence or declining issuance and support.

For traders and institutional investors, these figures signal that USDT and USDC continue to dominate, providing essential liquidity and market depth. The data also highlights opportunities: the growth potential in stablecoins like PYUSD and DAI, and specialized roles for decentralized stablecoins like LUSD, which offer alternatives during market volatility or regulatory pressures. Overall, this landscape underscores Ethereum’s stablecoin ecosystem’s diverse yet heavily concentrated user activity.

Stablecoin Velocity

Stablecoin velocity measures how frequently each stablecoin changes hands within a given period, reflecting market activity and user engagement. Higher velocity indicates active trading, liquidity provision, or frequent usage in transactions, whereas lower velocity implies more coins are held stationary as reserves or collateral.

In Q1 2025, velocity for PYUSD, USDC, and USDT all increased. Notably, PYUSD showed the highest growth rate—with velocity nearly doubled from approximately 3.28e-12 in early January to around 5.28e-12 by late February, signaling greater usage in trading and payment transactions, possibly driven by PayPal's expanding integrations and cross-chain initiatives. USDC and USDT also exhibited rising velocities, although at a slower pace. USDC increased from about 3.45e-12 to 5.50e-12, while USDT rose from 1.97e-12 to 3.38e-12, highlighting steady demand in DeFi protocols, institutional settlements, and retail usage.

The relatively lower velocity of USDT, despite its larger market cap, suggests more users hold it as long-term reserves or collateral compared to PYUSD and USDC, which appear increasingly favored for active transactions and liquidity pools. This evolving dynamic implies potential growth areas for PYUSD and USDC in payments and DeFi, whereas USDT remains the preferred stablecoin for reserves. For traders and institutions, increasing velocity is bullish for market liquidity, reducing slippage and enhancing trading conditions across Ethereum’s DeFi ecosystem.

Conclusion

Stablecoins demonstrated remarkable adaptability amid shifting regulatory environments. Tether (USDT) maintained dominance despite European regulatory pressures, while USDC significantly expanded its market capitalization through proactive regulatory alignment and integration with traditional financial systems. The rapid growth of PayPal’s PYUSD highlighted increasing institutional and retail adoption, whereas decentralized stablecoins like DAI faced modest declines amid an ongoing DeFi evolution.

If you're looking to enhance your market strategies, gain clarity through comprehensive analytics, or leverage detailed insights for informed decision-making, don't hesitate to contact us. Additionally, we invite institutional investors, brokers, and traders interested in our advanced analytical tools to book a personalized demo to experience firsthand how Amberdata can empower your crypto investment strategies and operational efficiencies.

Further Research and Insights

Explore extensive blockchain analytics and market research by Michael Marshall, Head of Research at Amberdata, on our comprehensive  research blog. Michael brings deep expertise across a diverse range of critical topics, delivering detailed analyses on market volatility, decentralized finance (DeFi), and actionable trading strategies tailored for both institutional and retail investors. Below is a selection of featured pieces, highlighting the variety of insights you can discover:

Dive into Bitcoin volatility with the foundational On-chain Metrics BTC Volatility Part 1, introducing essential indicators such as liquidity patterns, mining influence, and investor behaviors. Further deepen your understanding with  Part 2, exploring on-chain activity from miners and institutional traders during significant market events.

Examine Ethereum’s dynamic relationship with stablecoins in our DeFi Activity Stablecoins series, beginning with an overview of their liquidity impacts and risk implications. Part 2 provides a deeper statistical analysis, uncovering how stablecoin lending affects Ethereum’s intraday volatility, illustrating their dual roles in market stability and systemic risk.

For those interested in advanced trading strategies, our comprehensive Crypto Pairs Trading series starts by explaining cointegration and its advantages over simple correlation in Part 1.  Part 2 and Part 3 offer essential statistical validations and practical trading strategy guidelines. Conclude withPart 4, reviewing empirical results and strategy performance evaluations.

Finally, understand market liquidity and volatility drivers through practical applications, like our Orderbook Analysis, which examines real-world impacts on cryptocurrency trading during major macroeconomic disruptions.

These topics represent just a snapshot of the extensive insights available. Visit our blog to uncover more data-driven research and market analyses.

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