Stablecoin Market Surges 9.61% in Q1 2025, Dominated by USDT and USDC

The stablecoin market experienced significant growth in the first quarter of 2025, with the total supply reaching $233.47 billion by the first week of April. This marks a 9.61% increase from January, driven by rising institutional adoption, increased demand for on-chain liquidity, and the centralization of market power between two dominant issuers: Tether (USDT) and USD Coin (USDC).

USDT leads the market with a commanding $144 billion market cap, capturing 63% of the total stablecoin supply. USDC, while trailing, has reclaimed momentum with a market cap of $59 billion and a 27% share. Together, these two stablecoins control over 90% of the entire stablecoin market, leaving little room for challengers and pointing to a centralized power dynamic.

This growth aligns with Circle’s upcoming IPO plans, which were recently filed under the ticker “CRCL” on the New York Stock Exchange. Backed by major financial institutions, Circle eyes a $5 billion IPO despite a 42% slide in net income. The growing stablecoin market offers a favorable backdrop for such a move, potentially rekindling institutional interest at scale.

However, not all stablecoins have seen the same level of growth. DAI, FRAX, and TUSD saw sluggish growth, clinging to under 10% of market share—a clear signal of weak traction. Ethereum remains the stronghold for stablecoins, hosting 53.39% of all stablecoins, while Tron follows with 28.55%. This distribution hints at a platform bifurcation, where Layer 1 and Layer 2 chains increasingly specialize.

Despite the surge in supply, exchange activity paints a more volatile picture. February 2025 recorded peak inflows and outflows, but by March, net outflows hit -$2.9 billion, the largest quarterly drop. April then saw a sharp cool-off, with both inflows and outflows plunging over 80% from March levels. The 31st of March witnessed the largest single-day outflow—a striking $1.54 billion, following a hefty $1.39 billion inflow on the 3rd of February.

On one hand, the scaling of stablecoin supply and USDC’s rebound, coupled with IPO news, is reigniting institutional optimism. On the other hand, falling exchange flows may signal market fatigue, profit-taking, or a pivot to long-term holding strategies. The coming quarters will reveal whether a broader decentralization is possible—or whether stablecoins will continue operating under a tight, two-player regime.