Stablecoins, which play a major role in the global cryptocurrency ecosystem, saw massive adoption in 2024, with their transfer volumes beating those of Visa and Mastercard combined.
The annual stablecoin transfer volume reached $27.6 trillion last year, surpassing the combined volumes of Visa and Mastercard by 7.7%, according to a Jan. 31 report by crypto exchange CEX.io.
As CoinTelegraph's Helen Partz reports below, one of the major catalysts amplifying stablecoin transfer volume has been the increased use of bots, especially on Solana and Base, CEX.io lead analyst Illia Otychenko said.
Tether’s USDt, the world’s largest stablecoin by market capitalization, accounted for 79.7% of stablecoin trading volume on average, strengthening its position amid surging stablecoin reserves on centralized exchanges.
Stablecoins beat Visa and Mastercard despite losing share in the market
Stablecoin supply saw a significant surge of 59% in 2024, reaching 1% of the US dollar supply. Despite beating Visa and Mastercard in volumes, stablecoins lost 13.5% in share within the total market cap, CEX.io noted.
The market share drop mainly occurred in the third quarter of 2024 amid decreased activity in the broader crypto market.
2024 quarterly transfer volumes of stablecoins vs. Visa and Mastercard. Source: CEX.io
Regarding their overall growth, CEX.io’s Otychenko said:
“Stablecoins experienced a surge in both supply and volume following the post-election spike in crypto activity, surpassing Visa and Mastercard by over two and three times, respectively, in Q4 alone.”
Otychenko pointed to trends indicating that regular users are increasingly using stablecoins for savings and remittance transfers as a cost-efficient way to transfer value compared to traditional payment methods.
“However, stablecoins’ role as the lifeblood of crypto trading and DeFi interactions currently far outweighs this trend,” he added.
Bot activity accounted for 70% of stablecoin transfer volume
Trading bot activity comprised a massive share of stablecoin transaction volumes in 2024, which CEX.io estimated to account for 70%. On Solana and Base, the bot transactions accounted for 98% of the volume.
“High bot activity within the network doesn’t necessarily mean ‘worse’ transfer volume,” Otychenko said, adding that bots are often used to improve market efficiency through arbitrage or cover gas fees by paymasters.
Bots can be used for harmful practices like frontrunning, sandwich attacks, pump-and-dump schemes and snipping liquidity pools. Still, the bot dominance in stablecoins could also represent the maturation of certain networks, he noted.
Ethereum and Tron retain dominance, but other networks build up momentum
Ethereum and Tron continued to dominate as the primary networks for stablecoins in 2024, accounting for more than 83% of the market by the end of the year.
At the same time, their combined share fell from 90% at the beginning of the year, pointing to the ongoing diversification across other networks, particularly Solana, Arbitrum, Base and Aptos.
Stablecoin market cap distribution by network. Source: CEX.io
“This shift was particularly pronounced for Tron, which saw its market share decline significantly from 38% to 29%,” the report noted.
Ethereum’s stablecoin market cap surged by 65% in 2024, reaching a new all-time high. This growth was partly driven by a reduction in transaction fees following the Dencun upgrade in March, as well as post-election optimism in the United States, Otychenko said.