Stability in Digital Currencies: US Treasury Predicts $2 Trillion Market Value for Stablecoins by 2028.
Sizzling Stablecoins and Their Impact on Bitcoin
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The stablecoin market, largely tied to the U.S. dollar, is projected to skyrocket to an astounding $2 trillion by 2028, as per the U.S. Treasury's recent report. This burgeoning sector, dominated by big players like Tether's USDT and Circle's USDC, is drawing significant attention even from banking giants due to the push for regulatory clarity in the States.
Currently, the stablecoin market size is around $239 billion, according to CoinMarketCap's data, with stablecoin transaction volumes reaching a record-breaking $1.82 trillion in April. Venture capital firm a16z refers to stablecoins as the 'WhatsApp moment' for money, given their growing uses like international transactions, beyond mere crypto speculation.
Tracy Jin, COO of crypto exchange MEXC, believes this surge in stablecoins could send Bitcoin prices soaring. Jin stated, "Fiat inflows converted into Tether (USDT) and Circle (USDC) are streaming steadily into Bitcoin, which remains the primary driver behind its price growth this year. Currently, every additional billion in stablecoins tends to push the BTC price up by 8-10%."
Historically, stablecoin market expansion has been positively linked to Bitcoin price movements. However, there's a catch. The growth in top stablecoins, like USDT and USDC, might not always translate into immediate Bitcoin gains. For instance, between January and April 2025, the USDT market expanded from $137B to $148B ($11B), while USDC surged from $43B to $62B ($20B in growth). Meanwhile, BTC was only up 1.7% over the same period.
Intriguingly, stablecoin growth could have a positive impact on Bitcoin and the crypto market, but it might be due to uses beyond speculative trading, such as cross-border payments. As always, keeping a close eye on market dynamics is crucial for traders.
Source: U.S Treasury, CoinMarketCap, a16z, MEXC, Coinglass, Glassnode, Max Keiser, etc.
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([Enrichment Data] The relationship between stablecoin growth and Bitcoin prices has become increasingly significant in crypto markets, with stablecoin supply serving as both a liquidity indicator and speculative catalyst for Bitcoin price movements. Liquidity and capital inflows: Stablecoin market capitalization has grown substantially since 2019, creating an "on-chain liquidity pool" that facilitates Bitcoin trading. When stablecoin supply expands, it often signals fresh capital entering crypto markets, which historically correlates with Bitcoin price rallies. Recent evidence: In Q1 2024, a 5% increase in stablecoin supply coincided with a 12% Bitcoin price surge within the same period, according to Glassnode data. As of May 2025, Bitcoin's recent price movements show a complex relationship with a $162.4B stablecoin market cap, 3.7% spikes in stablecoin exchange inflows preceding price movements, and divergence patterns observed on May 5, 2025, where Bitcoin's price action decoupled temporarily from stablecoin metrics. Mechanisms driving Bitcoin demand: Max Keiser and others argue stablecoins artificially inflate Bitcoin's perceived demand by creating synthetic liquidity that enables leveraged Bitcoin positions, facilitating faster portfolio rebalancing between stable assets and volatile cryptos, and serving as collision reserves during market stress, indirectly supporting Bitcoin's valuation. While historical data through early 2025 shows strong correlation patterns, recent market behavior suggests the relationship might be evolving as stablecoins mature into a distinct asset class. Analysts now monitor stablecoin exchange inflows and Tether/Bitcoin trading pairs as leading indicators for potential price breakouts.)
- The U.S. Treasury forecasts that the stablecoin market, currently worth $239 billion, will surge to a staggering $2 trillion by 2028.
- The growing use of stablecoins, such as Tether's USDT and Circle's USDC, is attracting the attention of banking giants due to the push for regulatory clarity.
- Tracy Jin, COO of crypto exchange MEXC, posits that the surge in stablecoins could boost Bitcoin prices, with every additional billion in stablecoins potentially increasing BTC price by 8-10%.
- Historically, the expansion of the stablecoin market has shown a positive link with Bitcoin price movements, but there's a caveat: not all growth in stablecoins guarantees immediate Bitcoin gains.
- Stablecoin growth could have a positive effect on Bitcoin and the crypto market, but its impact might extend beyond speculative trading, such as cross-border payments.
- The relationship between stablecoin growth and Bitcoin prices has become increasingly relevant in the crypto markets, with stablecoin supply serving both as a liquidity indicator and a speculative catalyst.
- Analysts now monitor stablecoin exchange inflows and Tether/Bitcoin trading pairs as leading indicators for potential price breakouts, as stablecoins continue to develop as a distinct asset class within the broader crypto market.
