A recent report by Visa and Allium Labs indicates that the majority of stablecoin activity involves automated bots and traders rather than human users.
Visa claims that out of the reported $2.2 trillion in April transactions, less than 10% were driven by actual people.
Despite the significant bot-driven activity, the stablecoin market cap remains steady at around $150-$160 million, with Tether (USDT) and USD Coin (USDC) leading the market.
Visa's study also highlights a rise in monthly active users, reaching 27.5 million across various blockchain networks.
Research firm Sacra predicts that stablecoins could surpass Visa's transaction volume in Q2 2024.
According to a recent report by Visa and Allium Labs, the stablecoin market might not be as extensive as previously believed. The findings suggest that the vast majority of stablecoin transactions are not driven by human interaction. In fact, less than 10% of all stablecoin transactions are considered organic, originating from real users.
Visa's head of crypto, Cuy Sheffield, suggests that most stablecoin transactions are influenced by what he calls "a lot of noise." In April 2024 alone, the stablecoin market processed a staggering $2.2 trillion worth of transactions. However, upon closer examination, it becomes apparent that only about $265 billion of that total came from actual payment activity by individuals.
Visa's research involved filtering out bot-influenced and large-scale trader transactions to determine the number of individuals involved and the corresponding transaction amounts. It is worth noting that the current stablecoin market cap is estimated to be between $150 million to $160 million according to CoinMarketCap. Two leading stablecoins, Tether's USDT and Circle's USDC, dominate the market with a combined market share of over 90%.
Despite challenges in accurately tracking and monitoring the stablecoin market, Visa's study reveals a consistent increase in monthly active stablecoin users, reaching approximately 27.5 million users across various blockchain networks. Pranav Sood, an executive at Airwallex, suggests that the stablecoin market still has substantial room for growth as it is still in its early stages as a payment avenue.
In an interesting prediction, research firm Sacra suggests that stablecoins will surpass Visa's total payment volume in the second quarter of 2024, despite the noise and complexities associated with tracking this market. As the stablecoin market continues to evolve and integrate into the financial landscape of both crypto and traditional finance (TradFi), there is a growing need for refined data analytics to better understand the market and provide a secure environment for investors and traders.
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