Despite the surge in Stablecoin Supply to new record levels, cryptocurrency investors remained cautious as they waited for market stability amid the fear of US tariffs.
A new report from Crypto Intelligence Platform IntotheBlock shows that total Stablecoin supply rose over $30 billion in the first quarter of 2025, despite a 19% decline in Crypto’s overall market capitalization.
“The correlation between cryptography and inventory has climbed as macro expectations shifted from “golden age” optimism to tariff-driven fate and darkness,” according to Intotheblock’s quarterly report shared with Cointelegraph.
Source: ITB Capital Markets
According to Juan Pellicer, a senior research analyst at Intotheblock Crypto Intelligence Platform, Stablecoin Supply’s growth “reflects a careful stance, retaining Stablecoins as a hedge, possibly waiting for market stability and a better entry point.”
Related: Experts say we have the stablecoin rules we need before crypto tax reform
Industry leaders predict that Stablecoin’s supply could surpass $1 trillion in 2025, and could serve as a key crypto market catalyst.
“We are falling into a rise in the adoption of stubcoin, which is likely to increase dramatically this year,” said David Pakman of Cointelgraf on X on March 27th on the Chain Reaction Live Show.
Stablecoin Supply surpassed its high of $219 billion on March 15th. Analysts view an increase in Stablecoin supply as a signal to the continuation of the bull cycle.
Related: stablecoins tokenized assets as Trump’s tariffs loom, tokenized assets
Stablecoin activities will soar at Ethereum
In the first quarter of the year, Ethereum Network saw more than $3 trillion Stablecoin transactions on the mainnet, excluding the Layer 2 network.
The number of unique addresses using Stablecoins on Ethereum Mainnet also surpassed the record 200,000 mark for the first time in March.
The Stablecoin Daily Active address of Ethereum Mainnet. Source: IntotheBlock
Despite rising blockchain activity, the price of ether (ETH) fell by more than 45% in the first quarter of 2025, Cointelegraph Markets Pro Data shows.
ETH/USD, 1 year chart. Source: Cointelegraph Markets Pro Data Shows.
The decline in ETH is linked to a combination of broader macroeconomic concerns and Ethereum-specific pressures, such as increasing competition, such as the rise of networks such as Solana and the rise of layer 2 protocols.
“Some analysts claim that Layer-2 solutions dilute the value of ETH by shifting activity from the main chain, which argues that L2 still relies on Ethereum for security and payment fees and contributes to its ecosystem,” Periker said.
He added that the decline in ETH is likely due to market sentiment and uncertainty regarding Ethereum’s ability to acquire value from the broader ecosystem.
Still, other analysts are looking at the silver lining in tariff-related investors’ concerns. Nansen analysts predicted a 70% chance of the crypto market by June 2025 as tariff negotiations progressed.
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