Original Author: Frank, PANews
Since 2024, the global stablecoin market has grown by 80.7%, breaking through $235 billion, with USDT and USDC jointly contributing 86% growth and continuing to dominate the market. Puzzlingly, the incremental funds of hundreds of billions of dollars on Ethereum and TRON chains have not driven the Altcoin market to simultaneously surge as in previous cycles. Data shows that for every new $1 of stablecoins, only $1.5 of Altcoin market value growth is leveraged, which is 82% lower than the previous bull market.
PANews will analyze the comprehensive stablecoin data to interpret the ultimate crypto question: Where did the money go? As exchange balances surge and DeFi protocol staking increases, traditional financial institutions' over-the-counter trading, cross-border payment scenarios, and emerging market currency replacement demands are quietly reshaping the crypto world's capital flow map.
Stablecoin Market Value Increases by Hundreds of Billions, Ethereum and TRON Still Contribute 80% of Growth
According to defillama data, from 2024 to now, stablecoin issuance has grown from $130 billion to $235 billion, with an overall increase of 80.7%. The main growth still comes from USDT and USDC stablecoins.
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So where exactly is the new USDC traffic going? This might help explain the direction of funds in the market to some extent.
From the perspective of token holders, the top USDC holding addresses are mainly from DeFi protocols. Taking Ethereum as an example, the largest USDC holding address is Sky (MakerDAO)'s address, with 4.8 billion tokens, accounting for about 11.9%. In July 2024, this address held only 20 million tokens, which has increased 229 times in less than a year. Sky's USDC is mainly used as collateral for its stablecoins DAI and USDS. The growth of this address's USDC still represents the demand for stablecoins from DeFi protocol TVL.
Aave is the fourth-largest USDC holding address on Ethereum. On January 1, 2024, Aave held about 45 million USDC, which increased to 1.32 billion USDC at its peak on March 12, 2025, growing by approximately 1.275 billion dollars, accounting for 7.5% of the new USDC issuance on Ethereum.
From this perspective, the new USDC on Ethereum is mainly due to the growth of staking products. The total TVL on Ethereum was about $29.7 billion at the beginning of 2024, and although it has recently declined, it still has $49 billion in stock (with the highest TVL reaching $76 billion). Calculated based on $49 billion, the TVL growth rate on Ethereum could reach 64.9%, which is far greater than the growth of Altcoins last year and close to the overall stablecoin growth rate.
However, in terms of scale, although the TVL on Ethereum has grown by $19.3 billion, there is still a significant gap compared to the $58 billion growth of Ethereum stablecoins. Excluding the new issuance contributed by exchanges, staking protocols have not fully absorbed these stablecoin increments.
Emerging Scenarios: Paradigm Shift from Cross-border Payments to Institutional Transactions
In addition to the growth of DeFi's demand for stablecoins, consumer payments, cross-border remittances, and financial institution over-the-counter trading may also be new demands for stablecoin growth.
According to multiple official materials from Circle, stablecoins are gradually demonstrating their potential in scenarios such as cross-border remittances and consumer payments. A report by Rise shows that about 30% of global remittances are made through stablecoins. This proportion is particularly significant in Latin America and Sub-Saharan Africa. Retail and professional-level stablecoin transfers in these regions grew by over 40% year-on-year from July 2023 to June 2024.
According to a report released by Circle, the net USDC minted by Zodia Markets under Standard Chartered Bank has reached $4 billion in 2024 (Zodia Markets is an institutional digital asset brokerage company providing services including over-the-counter trading and on-chain foreign exchange for global clients).
Another Latin American retail payment company, Lemon, has customers holding over $137 million in USDC, with users primarily using stablecoins for retail payments.
Besides the demand increase caused by scenario differences, the different ecosystem structures of various chains have also created different stablecoin demands. For example, the MEME craze on the Solana chain has stimulated DEX trading demand. According to PANews's incomplete statistics, the TVL of USDC trading pairs (top 100) on the Solana chain is about $2.2 billion. Calculated based on USDC accounting for half, the deposited funds are approximately 1.1 billion USDC, accounting for 8.8% of USDC's issuance on the Solana chain.
Crypto Market Shifting from "Speculative Bubble" to "New Financial Product"
After analyzing stablecoins, PANews found it difficult to identify a single main driver of stablecoin growth, and thus unable to explain where the market money has gone. However, looking back, we may have reached a series of complex conclusions.
1. The market value of stablecoins is continuously growing, but these funds have clearly not massively flowed into the Altcoin market to become the initial driving force of the Altcoin season.
2. From the Ethereum market perspective, about half of the growth of the main stablecoin USDT is flowing into exchanges, but it seems more likely to be used for purchasing BTC (as the Altcoin and Ethereum markets have not shown significant growth) or for exchange financial products. The remaining growth demand may be absorbed by DeFi protocols. Overall, funds flowing into Ethereum are more focused on the stable returns of staking and lending protocols. The crypto market's attraction to traditional funds may no longer be wild price fluctuations, but a new type of financial product.
3. Changes in new scenarios, with traditional financial institutions like Standard Chartered Bank entering the crypto market, have also become a new demand for stablecoins. Additionally, underdeveloped regions are increasingly choosing stablecoins due to poor infrastructure and unstable local currency exchange rates. However, the data for this part is not yet fully calculated, and we do not know the exact proportion.
4. Stablecoins have different narrative demands on different chains. For example, Solana's growth demand might come from the trading heat generated by the MEME boom. New public chains like Hyperliquid, Berachain, and TON have also brought certain fund demands.
Overall, this subtle fund migration reveals that the crypto market is undergoing a paradigm shift. Stablecoins have broken through the boundaries of being merely a trading medium and have become a value channel connecting traditional finance and the crypto world. On one hand, Altcoins have not received large-scale blood transfusion from stablecoin growth. On the other hand, institutional financial product needs, payment necessities in emerging markets, and the maturity of on-chain financial infrastructure are pushing stablecoins towards a broader value-bearing stage. This may signal that the crypto market is quietly moving towards a historical turning point from "speculation-driven" to "value precipitation".
