Stablecoin Surge: Outpacing Visa and Signaling Crypto’s Growing Utility

The crypto sector experienced a rollercoaster first quarter of 2025, marked by initial optimism and subsequent challenges. Bitwise’s review described this period as “frustrating,” yet highlighted a significant milestone: stablecoin transactions surpassed Visa’s payment volumes. This surge, alongside the rebound in trading volumes for Bitcoin and Ethereum, and increased activity on Solana, XRP, and TRX, points to pockets of growth and potential recovery within the industry.

• Stablecoin transactions surpass Visa
• BTC and ETH trading volume rebound
• Solana, XRP, TRX see activity surge
• DeFi receives significant venture capital funding
• Pro-crypto regulatory environment

The crypto industry is no stranger to ups and downs, and the first quarter of 2025 was no exception. Bitwise’s analysis summed it up beautifully: “frustrating.” Despite this, the sector showed remarkable resilience, particularly in the realm of stablecoins. Stablecoins, cryptocurrencies designed to maintain a stable value by being pegged to assets like the US dollar, outpaced Visa’s transaction volumes last quarter. As Bitwise put it, “Stablecoins outperformed Visa last quarter. Need I say anything more?” This achievement underscores the increasing utility of cryptocurrencies in digital payments, serving as a lifeline for those in regions with unstable local currencies, like Venezuela where stablecoins like USDT are becoming essential for everyday transactions.

Bitcoin and Ethereum, the stalwarts of the crypto market, bounced back impressively. Bitcoin volumes, which had dipped below $20 billion per day in early March, rebounded to above $60 billion per day in recent sessions. Ethereum followed suit, recovering from sub-$12 billion levels in mid-March to around $26 billion per day. This resurgence signals a potential shift in market sentiment, suggesting that the market may be stabilizing after a period of volatility.

The surge in activity wasn’t limited to just Bitcoin and Ethereum. Other cryptocurrencies like Solana, XRP, and TRX also experienced significant growth. Solana’s trading volumes, for instance, jumped from $4 billion per day to $9 billion per day. This broad-based increase in activity across various cryptocurrencies indicates a renewed interest in the sector, despite not reaching the highs seen in January.

Decentralized Finance (DeFi) projects also saw substantial investment, receiving 18% of Q1 venture capital funding, matching infrastructure investments. Notable funding rounds included World Liberty Financial’s $590 million raise and Ethena’s $100 million round. This influx of capital reflects the growing interest in DeFi, which offers financial services built on blockchain technology without the need for traditional intermediaries. DeFi venture capital funding trends in 2025 further illustrate this point.

The regulatory and political environment also played a significant role in Q1 2025. A pro-crypto U.S. president and the SEC’s decision to drop several high-profile lawsuits created a historically positive political and regulatory climate. These developments provided a foundation for cautious optimism about the sector’s future, despite the challenges faced.

From a Bitcoin maximalist perspective, while the focus on stablecoins and altcoins is noteworthy, Bitcoin’s role as a store of value remains crucial. Its resilience during market downturns offers a counterpoint to the optimism around other cryptocurrencies, emphasizing the importance of a diversified crypto portfolio. Bitcoin maximalists argue that Bitcoin’s primary function as a store of value and a hedge against inflation should not be overlooked amidst the excitement about other crypto assets.

However, the growth in stablecoin usage and tokenized real-world assets aligns with the philosophy of effective accelerationism (e/acc), which advocates for accelerating technological and financial innovation to disrupt traditional systems. Tokenized real-world assets, which are traditional assets like real estate or bonds represented on a blockchain for easier trading, grew from $14 billion to $19 billion, reflecting increasing demand from both crypto enthusiasts and traditional investors.

While the first quarter of 2025 was marked by challenges, it also highlighted the potential for recovery and growth. The increasing use of stablecoins and DeFi aligns with the principles of decentralization and privacy, offering an alternative to centralized financial systems. Yet, the industry must navigate challenges such as regulatory uncertainties, security concerns in DeFi platforms, and market volatility to sustain its growth trajectory.

Stablecoins are the Swiss Army knives of crypto – versatile and reliable, unlike some of their more volatile cousins. They’re becoming the go-to for digital payments, offering a stable haven in the often turbulent crypto sea. DeFi, on the other hand, is like a wild west of finance, where you can get a loan without a bank, or trade assets without a broker. Tokenized real-world assets are like putting a turbocharger on traditional finance, making everything from real estate to bonds more accessible and liquid.

As we look forward, the increasing use of stablecoins and DeFi aligns with the principles of decentralization and privacy, offering an alternative to centralized financial systems. Yet, the industry must navigate the challenges and risks, such as security concerns and regulatory uncertainties, to sustain its growth trajectory.

Here are the key takeaways and questions arising from the developments in the crypto industry during the first quarter of 2025:

• What term did Bitwise use to describe the first quarter of 2025?
  Frustrating.
• How did stablecoin transactions compare to Visa payments last quarter?
  Stablecoin transactions outpaced Visa payments.
• What was the trend in daily active addresses on Base during the first quarter of 2025?
  Daily active addresses decreased from their peak in Q4 2024.
• What were the trading volume recoveries for Bitcoin and Ethereum during the quarter?
  Bitcoin volumes rebounded from below $20 billion/day to above $60 billion/day, while Ethereum volumes recovered from sub-$12 billion levels to around $26 billion/day.
• Which other cryptocurrencies saw a surge in activity during the quarter?
  Solana, XRP, and TRX.
• What factors are analysts attributing to the potential market recovery?
  Rising volumes, broader market stabilization, and increasing risk appetite.