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Understanding Stablecoin marketshare: what are stablecoins actually being used for?: A Technical Analysis for Alt Asset Traders

By Altscreener AI
cryptocurrencydefitechnical-analysistradingstablecoinmarketshare:whatstablecoinsactuallybeingusedfor?

Stablecoin Market Overview

Stablecoins – cryptocurrencies pegged 1:1 to fiat currencies (mostly the USD) – have quietly become central to the crypto markets. Today the stablecoin sector commands on the order of a quarter-trillion dollars in market value. According to recent industry data, the total stablecoin market cap was about \$250 billion by mid-2025 (www.stablecoininsider.com). Tether (USDT) remains the clear leader, holding roughly \$157.5 billion (≈64%) of that total (www.stablecoininsider.com). USD Coin (USDC) is second at roughly \$60–61 billion (≈24%), and all other stablecoins (DAI, GHO, FRAX, etc.) make up the remaining ≈12% (www.stablecoininsider.com). These figures are broadly consistent with other reports (for example, Nasdaq notes that USDT accounted for about \$140 billion of a \$205 billion stablecoin market in late 2024 (www.nasdaq.com)).

Stablecoins now rival major cryptocurrencies. By market capitalization they already exceed most altcoins and equal or surpass a quarter of all crypto assets combined. In fact, one recent chart shows stablecoins as the third-largest component of crypto market cap after Bitcoin and Ethereum. This dominance isn’t just on paper – it’s visible in trading: Chainalysis reports that stablecoins account for over two-thirds of the dollar value of all on-chain crypto transactions (www.chainalysis.com). In other words, the majority of value flowing through blockchain networks today is being transacted in stablecoins.

These figures underscore that stablecoins have become the default medium of exchange on crypto rails. Their price-stability (pegged to fiat) makes them ideal for moving and storing value without volatility, so traders, DeFi protocols, and businesses can shift funds on-chain without “going back to fiat.”

Key Stablecoin Use Cases

Stablecoins are used in a variety of ways by traders, developers, and institutions. Major use cases include:

  • Trading and Liquidity Management: On centralized and decentralized exchanges alike, USDT and USDC trading pairs dominate volume. By parking funds in stablecoins, traders can hedge volatility without leaving the blockchain. In fact, stablecoins now underlie a majority of crypto trading volume – Chainalysis finds they comprise more than two-thirds of total transaction value (www.chainalysis.com). This makes stablecoins the on-chain equivalent of “cash” in traditional markets, providing deep liquidity for swapping into and out of volatile tokens.
  • DeFi Lending and Yield Farming: Stablecoins often serve as the foundation of DeFi protocols. They are widely used as collateral for lending, borrowing, and liquidity pools. For example, protocols like MakerDAO issue dollar-stable DAI for use in lending markets, and platforms like Aave or Compound allow users to lend out USDC/USDT to earn interest. Because stablecoins don’t fluctuate like ETH or BTC, they enable predictable yield strategies. (Indeed, many DeFi stablecoins even offer governance-token rewards or interest rates for locking in liquidity.) While precise TVL figures fluctuate, industry analysis notes that stablecoins constitute a large majority of DeFi liquidity pools, underscoring that major DeFi growth often revolves around stable assets (www.stablecoininsider.com) (www.stablecoininsider.com).
  • Payments and Remittances: Stablecoins solve real-world payment frictions, especially in emerging markets. Businesses use them for cross-border transfers, payroll, and supplier payments, benefiting from near-instant settlement and avoidance of local currency volatility. A striking example comes from Sub-Saharan Africa: a 2024 report found 43% of all crypto transaction volume in SSA was in stablecoins (techcabal.com). Nigeria alone saw nearly \$22 billion in stablecoin transfers from July 2023 to June 2024 (techcabal.com), and in South Africa stablecoins have even overtaken Bitcoin as the most-used crypto. Stablecoin infrastructure firms report that nearly all business transactions on their rails involve stablecoins – for instance, Yellow Card (operating in 20 African countries) notes that 99% of its volume is now in stablecoins (mostly USDT), serving 30,000 businesses and processing over \$6 billion (techcabal.com). Companies rely on stablecoins to bypass local FX shortages and banking delays; for example, South African firms are already running payroll over stablecoin networks to pay staff continent-wide (techcabal.com).
  • Institutional Treasury and Corporate Use: Large financial institutions and fintech firms are building stablecoin solutions for treasury and settlement. Major players like Visa and PayPal have launched stablecoin projects: Visa’s new Tokenized Asset Platform and Stripe’s acquisition of Bridge are explicitly aimed at stablecoin payments, and PayPal introduced its own USD stablecoin (PYUSD) to facilitate transactions (www.nasdaq.com). Such moves by incumbents signal that stablecoins are moving beyond crypto-niche into traditional finance workflows (e.g. global payrolls and remittances). In regulated markets (like the EU under MiCA rules), licensed stablecoins (USDC with an EU e-money license) are even positioned as “digital euros” for cross-border commerce.

Collectively, these use cases illustrate why stablecoins have far outgrown their original intent of “just crypto to fiat.” They now serve as the plumbing of global digital finance – a neutral, easily-transferable medium.

Detailed Use-Case Analysis

In practice, different parts of the ecosystem emphasize different stablecoin roles:

  • Trading and Exchanges: No matter where one trades crypto, USDT or USDC are almost always available as a quote currency. On many exchanges, USDT trading pairs account for the lion’s share of volume. Traders often swap volatile altcoins into stablecoins between positions to lock in gains or hedge risk. The result is enormous stablecoin velocity: Chainalysis’ finding that stablecoins represent over two-thirds of transaction value (www.chainalysis.com) effectively means that more tokens are moving in and out of stablecoins than any other asset on-chain.
  • DeFi Liquidity and Borrowing: DeFi protocols rely heavily on stable assets. For example, MakerDAO’s DAI sees billions minted to collateralize loans, and DeFi “money markets” generally hold huge reserves of USDC/USDT because borrowers often prefer to pledge eggs (volatile cryptos) to borrow dollars. Yield-seeking users deposit stablecoins into automated market maker pools (e.g. ETH/USDC pools) or lending apps to earn interest. Stablecoin liquidity is so central that new algorithmic or fractional-stable models (like Frax, GHO, or Basis Cashe-type projects) continue to emerge to try to capture some of this lucrative demand.
  • Payments and Remittances: Particularly outside major economies, stablecoins enable cheap, fast cross-border payments. Traditional global transfers (SWIFT, remittance networks) can be slow and expensive; stablecoins settle in minutes and have negligible fees across borders. TechCabal reports that regulated businesses in Africa are turning to stablecoins for exactly these reasons (techcabal.com) (techcabal.com). Corporate finance teams use dollar-stable crypto to hedge against local-currency inflation while still being able to transact immediately.
  • Example: Yellow Card, an African crypto payment provider, saw 99% of its payment volume in USDT, helping companies send dollars across borders for payroll and invoices (techcabal.com).
  • Example: A report found Nigeria handled \$22B of on-chain stablecoin flows in one year (techcabal.com) – flows that primarily represent businesses and individuals moving USD-value around West Africa without relying on local FX markets.
  • Institutional Treasury and On-Ramps: Beyond daily payments, stablecoins are seen by firms as a proxy for cash on the blockchain. Companies with international operations can hold USDC or USDT in a corporate wallet rather than in traditional bank accounts, allowing instant global dispersion of funds. Investment arms of banks and funds also use stablecoins as a short-term “parking” of capital that still earns a yield on DeFi money markets, instead of leaving capital idle. Notably, the traditional payments industry is embedding stablecoins: Visa’s tokenized network and PayPal’s PYUSD aim to let everyday consumers and businesses spend or transfer value digitally without going through banks (www.nasdaq.com).

These diverse uses explain why stablecoin growth has been explosive. The utility of being able to transact USD-value on-chain – without volatility and without traditional rails – is finally being realized at scale across trading, DeFi, and real-world finance.

Metrics and Market Share

Pulling together the data: stablecoins now command several hundred billion in supply, and new issuance continues. By one measure, the stablecoin ecosystem grew roughly 45× since 2019 (www.stablecoininsider.com). This market isn’t monopolized by crypto-native holders; rather, it spans retail traders, DeFi protocols, fintech platforms, and even retail consumers abroad. In fact, regulatory attention has surged in the last year precisely because stablecoins straddle the line between crypto asset and fiat deposit.

On the market-share charting front, all sources agree Tether is dominant. In early June 2025, Tether’s ~$157.5B supply was about 64% of the stablecoin market (www.stablecoininsider.com). USDC’s supply (~\$61B) was ~24% (www.stablecoininsider.com), and the “long tail” (DAI, FRAX, GHO, Binance USD, etc.) made up the rest. Tether’s share dipped from roughly 69% the year before to 64%, reflecting USDC’s growth and new entrants (www.stablecoininsider.com), but USDT still remains the preferred stablecoin on most exchanges due to its liquidity (www.stablecoininsider.com). These figures align with other analyses: Nasdaq’s late-2024 review pegged the whole stablecoin market at \$205B with USDT alone at \$140B (www.nasdaq.com).

In summary, stablecoins have the scale to rival major financial instruments. They now move more value than some of the biggest payment networks on a daily basis. (Indeed, independent analyses have noted that aggregate stablecoin on-chain volume now exceeds the combined payment volume of Visa and Mastercard. (www.nasdaq.com) (www.chainalysis.com))

Conclusion

For the technical trader or analyst, the implication is clear: stablecoins are no longer a minor corner of crypto – they’re the foundation. Whether it’s hedging altcoin exposure, seeking yield in DeFi, or tapping into cross-border payment rails, stablecoins are the go-to tool. The data – vast market capitalization, overwhelming share of on-chain volume, and real-world corporate usage cases – all point to stablecoins being a core infrastructure, not just a convenience.

As the ecosystem evolves, expect stablecoins to become even more entwined with traditional finance use-cases. From regulated stablecoins in banking apps to new on-ramps via credit cards (using tokenized USD), the trend is one of integration. For traders, that means stablecoins will remain the principal bridge between crypto speculation and the outside world – a consistent, liquid asset for flows in and out of token markets. In short, stablecoins aren’t just being used for something; stablecoins are the something – the medium, margins, and mechanism of modern crypto finance (www.chainalysis.com) (techcabal.com).

Source: Industry reports and on-chain analytics (www.chainalysis.com) (www.stablecoininsider.com) (techcabal.com) (www.nasdaq.com).