JPMorgan says rising stablecoin use may not lead to similar market cap growth

JPMorgan analysts believe that while stablecoin usage is rapidly increasing, this may not translate into proportional growth in their total market capitalization. The primary driver for this prediction is the rising velocity of stablecoins, meaning each stablecoin is being used more frequently in transactions. This increased efficiency allows a smaller amount of stablecoins to handle a larger volume of transactions. The analysts argue that as stablecoin-based payment systems become more efficient and their velocity rises, it will likely cap the expansion of the stablecoin market, even with exponential growth in their usage for payments. This view aligns with previous cautious projections from JPMorgan analysts regarding stablecoin market cap growth, with earlier forecasts suggesting a market cap of around $500–$600 billion by 2028, and deeming trillion-dollar market projections as overly optimistic. Despite these concerns about market cap expansion, the stablecoin market has seen significant growth, with its market cap increasing by nearly $100 billion in the past year, exceeding $300 billion when including yield-bearing stablecoins. On-chain transaction volume for stablecoins is also substantial, estimated at an annual pace of $17.2 trillion, with growth accelerating after the passage of the GENIUS Act in the U.S. and reflecting increased adoption for payments, particularly in Asia, though consumer-to-business and merchant payments are growing faster than consumer-to-consumer transactions.

(Source：The Block)