Forward the Original Title ‘A Comprehensive Data Analysis of the Capital Flows Behind the $100 Billion Stablecoin Surge: Altcoins Didn’t Rise—Where Did the Money Go?’

This PANews article provides an in-depth data dissection of stablecoins, aiming to answer a fundamental question raised by their rapid growth: Where did all the money go?

Since the beginning of 2024, the global stablecoin market has soared by 80.7%, exceeding $235 billion. The USDT-USDC duopoly continues to dominate the market, contributing 86% of that growth. However, in a puzzling turn, the influx of over $100 billion onto Ethereum and Tron hasn’t sparked a corresponding rally in the altcoin market, unlike previous cycles. Data shows that in this round, every $1 increase in stablecoin supply has only driven a $1.50 increase in altcoin market cap—a sharp 82% drop compared to the last bull market.

This piece by PANews explores where these stablecoin inflows are actually going. While exchange balances are soaring and DeFi protocol staking volumes are rising, capital is also quietly flowing into OTC trading by traditional financial institutions, cross-border payment use cases, and currency substitution in emerging markets—gradually redrawing the capital flow landscape of the crypto world.

Stablecoins Add $100 Billion in Market Cap—Ethereum and Tron Account for 80% of Growth

According to data from DeFiLlama, the total supply of stablecoins has grown from $130 billion to $235 billion since the start of 2024—an 80.7% increase. The bulk of this expansion is still driven by the two leading stablecoins: USDT and USDC.

On January 1, 2024, USDT’s circulating supply was $91 billion. By March 31, 2025, it had grown to $144.6 billion—an increase of about $53.6 billion, accounting for 51% of the total growth. Over the same period, USDC’s supply rose from $23.8 billion to $60.6 billion, contributing approximately 35% of the growth. Together, these two stablecoins not only hold 87% of the market share but also contributed 86% of the growth during this period.

Breaking it down by blockchain, Ethereum and Tron remain the two dominant chains for stablecoin issuance. Ethereum accounts for 53.62% of total issuance, while Tron accounts for approximately 28.37%, giving them a combined share of 81.99%.

Between January 1, 2024, and April 3, 2025, Ethereum saw an increase of about $58 billion in stablecoin supply—an 86% rise, closely mirroring the growth rates of USDT and USDC. In contrast, Tron’s growth rate was about 34%, falling short of the overall pace of stablecoin expansion.

The third-largest blockchain in terms of stablecoin growth is Solana, which saw its supply increase by $12.5 billion over the same period—a staggering 584.34% rise. Next is Base, with $4 billion in new issuance and a growth rate of 2,316.46%.

Among the top ten blockchains, Hyperliquid, TON, and Berachain only began issuing stablecoins within the past year. Together, they’ve contributed approximately $3.8 billion in new stablecoin supply, accounting for 3.6% of overall growth. In summary, Ethereum and Tron remain the dominant platforms for stablecoin activity.

Each New $1 Only Drives $1.50 in Altcoin Market Cap—A Dramatic Decline

Despite the rapid on-chain expansion of stablecoins, the growth of the altcoin market during the same period has been underwhelming.

For comparison: in March 2020, the total altcoin market cap (excluding BTC and ETH) was about $39.8 billion. By May 2021, that figure had surged to $813.5 billion—a 19.43x increase. During the same period, the stablecoin market grew from $6.14 billion to $99.2 billion, a nearly 15x increase, showing a relatively synchronized growth pattern.

In the current bull market, while stablecoin market cap has grown by 80%, the total altcoin market cap has only increased by 38.3%, or approximately $159.9 billion.

Looking back, in the 2020–2021 cycle, each additional $1 in stablecoins led to an $8.30 increase in altcoin market cap. But in the 2024–2025 cycle, that ratio has plummeted to just $1.50. This dramatic drop suggests that the newly issued stablecoins are no longer primarily used to purchase altcoins.

So where did the money go? That’s the key question.

The Public Chain Landscape is Shifting: Ethereum and Tron Hold Steady While Solana and Base Break Through

At first glance, the MEME coin frenzy on Solana has been a defining feature of this bull run. However, most MEME trading activity has taken place against SOL pairs, with limited stablecoin involvement. As previously noted, the bulk of stablecoin growth has still occurred on Ethereum.

To uncover where stablecoins are really flowing, attention must remain on Ethereum and the major stablecoins like USDT and USDC.

Before diving into the analysis, let’s outline some of the prevailing theories on stablecoin utilization. Market speculation suggests they are increasingly being used for payment scenarios, staking yields, and as stores of value.

Let’s start by examining stablecoin trading activity on Ethereum. The following chart reveals a heartbeat-like regularity in trading volume fluctuations, which may point to underlying patterns in stablecoin usage.

When zooming in on shorter timeframes, a clear trading rhythm emerges—what can be described as a “5+2” pattern: five days of high activity followed by two days of low activity. Notably, the low points consistently fall on weekends, while volumes generally climb from Monday to Wednesday, then taper off on Thursday and Friday.

This consistent volatility suggests that a significant portion of stablecoin transactions may be driven by institutions or enterprises. If stablecoins were primarily used for consumer-level payments, we wouldn’t expect such pronounced weekday/weekend variation.

Moreover, looking at daily transaction frequency, USDT transfers on Ethereum rarely exceed 300,000 in a single day. On weekends, both the number of transfers and the average transfer amount tend to drop noticeably, further supporting the institutional-activity hypothesis.

USDT Flows Into Exchanges, USDC Sinks Into DeFi

Looking at wallet distribution, USDT balances on centralized exchanges have increased significantly over the past year. On January 1, 2024, exchange-held balances stood at 15.2 billion USDT. By April 2, 2025, this number had risen to 40.9 billion USDT—an increase of $25.7 billion, or 169%.

This rate of growth far exceeds the overall 80.7% increase in stablecoin supply and represents 48% of the total USDT issued over the same period.

In other words, roughly half of the new USDT supply over the past year has flowed directly into exchanges.

However, USDC tells a very different story. As of January 1, 2024, exchanges held around 2.06 billion USDC. By April 2, 2025, this had increased to only 4.98 billion USDC. During the same period, the total USDC supply increased by 36.8 billion USDC. That means only about 7.9% of new USDC found its way onto exchanges.

In total, exchange-held USDC accounts for just 8.5% of circulating supply—far lower than USDT’s 28.4%.

This indicates a significant divergence in usage: while most of the new USDT has flowed into centralized trading platforms, newly minted USDC has largely avoided exchanges.

To understand the destination of USDC’s new inflows, we need to examine where the largest holdings reside—which in turn sheds light on broader market capital flows.

From an address distribution perspective, many of the top USDC-holding addresses on Ethereum belong to DeFi protocols. For instance, the largest holder of USDC is Sky, a wallet associated with MakerDAO, holding 4.8 billion USDC—roughly 11.9% of total USDC supply. Back in July 2024, this address held only 20 million USDC. That’s a staggering 229x increase in under a year.

Sky primarily uses USDC as collateral to mint its own stablecoins, DAI and USDS. The growth in USDC held by this address reflects an increasing demand for stablecoins driven by the growth in DeFi total value locked (TVL).

Aave is another major DeFi protocol, ranking as the fourth-largest holder of USDC on Ethereum. On January 1, 2024, Aave held around 45 million USDC. By March 12, 2025, this had surged to 1.32 billion USDC—an increase of approximately $1.275 billion. This amount alone accounts for 7.5% of the newly issued USDC on Ethereum.

From this, it’s evident that the increase in USDC on Ethereum is largely driven by the rise in staking and lending products. At the beginning of 2024, Ethereum’s total value locked (TVL) stood at around $29.7 billion. Despite a recent dip, the TVL still hovers around $49 billion (with a peak of $76 billion). Based on the $49 billion figure, Ethereum’s TVL has grown by approximately 64.9%—a rate that surpasses last year’s growth in the altcoin market and closely aligns with the overall stablecoin growth rate.

However, in absolute terms, Ethereum’s TVL has grown by about $19.3 billion, while the total stablecoin supply on Ethereum has increased by $58 billion over the same period. This suggests that even after accounting for exchange inflows, staking protocols have not absorbed all of the new stablecoin supply.

New Use Cases Emerging: From Cross-Border Payments to Institutional Trading

Beyond DeFi, the growing demand for stablecoins is increasingly being driven by emerging use cases like retail payments, cross-border remittances, and institutional OTC trading.

According to various official sources from Circle, stablecoins are starting to show real utility in payment and remittance applications. A report from Rise indicates that around 30% of global remittances are now conducted using stablecoins. This trend is particularly pronounced in Latin America and Sub-Saharan Africa, where retail and professional-grade stablecoin transfers grew by over 40% year-over-year between July 2023 and June 2024.

Circle also revealed that in 2024, Standard Chartered’s digital asset brokerage Zodia Markets minted a net $4 billion in USDC. Zodia Markets serves institutional clients with services like OTC trading and on-chain foreign exchange (FX).

Another example of growing real-world stablecoin usage is Lemon, a Latin American retail payment company. Its users currently hold over $137 million in USDC, primarily using stablecoins for everyday payments.

Beyond differences in usage scenarios, the unique structure of each blockchain ecosystem also creates varying levels of demand for stablecoins. For instance, the MEME coin boom on Solana has spurred demand for DEX (decentralized exchange) trading.

According to PANews’ incomplete statistics, the top 100 USDC trading pairs on Solana hold approximately $2.2 billion in TVL. Assuming USDC comprises about half of this liquidity, that’s around $1.1 billion in USDC, or roughly 8.8% of all USDC issued on Solana.

From “Speculative Bubble” to “Next-Gen Financial Product”

After deconstructing stablecoin trends, PANews concludes that it’s difficult to pinpoint a single driving force behind the rise in stablecoin supply. Consequently, there’s no definitive answer to the central question: Where did the money go?

However, the analysis reveals a multi-faceted reality:

1. Stablecoin market cap continues to grow, but clearly, these funds have not significantly flowed into altcoins. This growth isn’t fueling an altcoin season as seen in past cycles.
2. On Ethereum, around half of USDT’s growth has flowed into exchanges. But given the lack of price movement in ETH and altcoins, it’s likely that much of this capital is being used to buy BTC or is sitting in exchange-based yield products. The rest is likely absorbed by DeFi protocols. Overall, capital flowing into Ethereum appears more focused on stable yield products in lending and staking protocols. The appeal of crypto for traditional capital seems to be shifting from speculative gains to structured financial products.
3. Emerging use cases such as institutional involvement (e.g., Standard Chartered) and adoption in underdeveloped regions are becoming new sources of demand for stablecoins. These areas often face infrastructural limitations or unstable local currencies, making stablecoins an appealing alternative. However, this segment is still under-documented, and its full scale remains unknown.
4. Each blockchain exhibits distinct narratives and use cases for stablecoins. On Solana, growth is fueled by DEX trading around the MEME coin boom. On newer chains like Hyperliquid, Berachain, and TON, the excitement around ecosystem development is generating increased demand for capital.

Taken as a whole, the undercurrents of this capital migration point to a paradigm shift in the crypto market. Stablecoins are evolving beyond their role as transactional media, becoming value pipelines bridging traditional finance and decentralized ecosystems. On one hand, altcoins are not receiving the liquidity boost they once enjoyed from stablecoin inflows. On the other, institutional demand for yield, payment use cases in underserved markets, and the maturation of on-chain financial infrastructure are pushing stablecoins into broader value-bearing roles. This may mark a historic turning point in crypto: a quiet transition from speculation-driven dynamics to value anchoring and real-world utility.

Disclaimer:

1. This article is a translated repost from [PANews]. Forward the Original Title ‘A Comprehensive Data Analysis of the Capital Flows Behind the $100 Billion Stablecoin Surge: Altcoins Didn’t Rise—Where Did the Money Go?’. All copyrights belong to the original author [Frank]. For concerns about this translation, please contact the Gate Learn team.

2. Disclaimer: The views expressed in this article are solely those of the author and do not constitute investment advice.

3. Translations into other languages are provided by the Gate Learn team. Do not copy, distribute, or plagiarize this translation without mentioning Gate.io.