The stablecoin market is experiencing a fascinating paradox: while Stablecoins’ total market cap is down significantly, with a decline of more than $50 billion over the past 14 months, they remain crucial for spot Bitcoin activity. According to Defillama, the stablecoin market cap is... shrinking, yes, but its impact on Bitcoin trading is undeniable.

Stablecoin Market Cap Shrinks, But Tops in Spot Bitcoin Activity: A Deep Dive

While the overall market cap of stablecoins has contracted, their dominance in facilitating spot Bitcoin trades remains strong. A Forbes analysis found that despite crypto’s global nature, spot bitcoin trading activity is centered around relatively few currency pairs and stablecoins. This highlights the continued importance of these dollar-pegged digital assets within the cryptocurrency ecosystem.

This article analyzes five stablecoins that account for more than 90% of the $125 billion market cap as of June 2025, all of which are pegged to the US dollar ($1). We studied their… performance, stability, and impact on the broader crypto market.

Notably, not all stablecoins are experiencing the same fate. Stablecoin TrueUSD (TUSD) stablecoin has defied the market-wide slump, with its trading volume increasing to $29 billion so far this month, per CCData. TUSD has overtaken... other stablecoins in certain trading pairs, indicating a shift in market preference and potentially highlighting concerns around other stablecoin issuers.

This trend raises important questions about the future of stablecoins and their role in the cryptocurrency landscape. Despite the shrinking market cap, their utility in facilitating efficient and liquid Bitcoin trading suggests they are here to stay, albeit perhaps in a reshaped form. Understanding the dynamics of these key stablecoins is crucial for navigating the evolving digital asset market.