Bitcoin and Ether slowed down growth in Q1 2025 as investors sought safety with USDT, USDC and other Stablecoin.
In the first three months of 2025, the stablecoin market surged by $30 billion as investors sought refuge from turmoil in the broader crypto space. A report from IntoTheBlock highlights that people moved their funds into stablecoins to avoid significant price fluctuations.
While the overall crypto market value decreased by 19%, stablecoins emerged as the preferred choice for investors aiming to stay in crypto while minimizing risk.
From December 2024 to March 2025, the total crypto market cap declined steadily. It fell from approximately $4 trillion in December to $3.29 trillion in January, then to $3 trillion in February, and finally to $2.76 trillion by March 30 representing a $1.24 trillion decrease over three months.
Bitcoin’s market cap increased in January 2025, rising from $1.86 trillion in December to $1.98 trillion, a $120 billion gain attributed to a new all-time high. However, it then fell to about $1.78 trillion in February and further to $1.676 trillion in March.
Ethereum’s value steadily declined during this period. It began at approximately $422 billion in December, dropped to $398 billion in January, then to $302 billion in February, and finally to $217.51 billion by March. Over this time, Ethereum lost about $204.49 billion in value, with its price decreasing from around $3,500 to $1,806 by the end of March.
Meanwhile, the stablecoin market cap experienced rapid growth. It increased from $200 billion in December 2024 to $228 billion in January 2025. Although it slightly dipped to $227 billion in February, it remained stable in March, despite briefly peaking at $234.6 billion in mid-March.
Tariffs, South Korea and MiCA
Investors turned to stablecoins primarily to safeguard their money as Bitcoin and Ethereum prices declined. Additionally, US tariffs increased market pressure.
See why a US Rep. warns stablecoins may led to disaster and taxpayer-funded bailouts
Beyond investor caution, other factors contributed to the rise of stablecoins. The introduction of the GENIUS Act, allowing banks to issue stablecoins under federal oversight, boosted confidence among both large and small investors.
In South Korea, the Finance Ministry began developing rules for cross-border stablecoin transactions. By February, stablecoins accounted for 17% of trade volume on platforms such as Bithumb and Upbit.
In Europe, the MiCA regulation, which took full effect in January 2025, required stablecoin issuers to obtain licenses. This initiative fostered a more trustworthy environment for stablecoin usage.
IntotheBlock observed that stablecoins are gaining momentum as investors look for a safe haven. However, many investors are merely waiting out the bear market—they haven’t abandoned crypto altogether.
