$1 Trillion Stablecoin Supply Could Spark Next Crypto Bull Run, Says CoinFund’s Pakman

$1 Trillion Stablecoin Supply: A Potential Catalyst for the Next Crypto Rally, According to CoinFund’s David Pakman

David Pakman, managing partner at CoinFund, has shared his bullish outlook on the cryptocurrency market, predicting that the global supply of stablecoins could reach $1 trillion by the end of 2025. According to Pakman, this surge in stablecoin supply would act as a significant driver for mainstream cryptocurrency adoption, marking a "tipping point" for blockchain-based finance.

During an appearance on Cointelegraph’s Chainreaction live show on X (formerly Twitter) on March 27, Pakman outlined his vision for a massive rise in stablecoin usage. He believes the market could see the supply grow from around $225 billion to $1 trillion in just this calendar year. Such an increase, while modest compared to the broader financial market, would represent a major shift for decentralized finance (DeFi) and cryptocurrency ecosystems.

“We’re in a stablecoin adoption upswell that’s likely to increase dramatically this year,” Pakman stated. “We could go from $225 billion stablecoins to $1 trillion just this calendar year,” he added, noting that this growth would be a “meaningfully significant” milestone for blockchain and DeFi development.

Stablecoin Supply Growth and DeFi

Pakman’s comments highlight a trend that has already been building momentum in the crypto space: the growth of capital flowing on-chain. This is further amplified by increasing interest in cryptocurrency-related exchange-traded funds (ETFs), which could help drive more capital into decentralized finance applications.

“If we have a moment this year where ETFs are permitted to provide staking rewards or yield to holders, that unlocks really meaningful uplift in DeFi activity,” Pakman explained. This shift could result in a surge of activity in DeFi platforms, as ETFs would allow users to earn rewards while holding crypto assets, boosting liquidity in the process.

As of March 28, data from Glassnode revealed that the aggregate supply of the five largest stablecoins had surpassed $208 billion, a record high. This growth trajectory, according to Pakman, signals that the cryptocurrency market could still be "mid-cycle" rather than nearing its peak, based on analysis from IntoTheBlock analysts.

Stablecoins and Payments: A Growing Trend

Beyond just their role in DeFi, stablecoins are increasingly being used for day-to-day payments. Pakman highlighted that the volume of stablecoin transactions has grown over 22 times since 2021, with a noticeable reduction in the size of individual transactions. This trend points to a broader use case for stablecoins beyond large transfers, as they are increasingly being adopted for smaller, more frequent payments.

“We’ve seen a significant decrease in the size of each stablecoin transaction, which points to the fact that they are being used more as payments and less for large transfers,” Pakman said, indicating that stablecoins are being embraced for everyday transactions. This aligns with statements from CryptoQuant’s CEO, Ki Young Ju, who has noted that stablecoins are increasingly used for remittance payments and as a store of value.

The Road Ahead: Challenges and Catalysts

While the rise in stablecoin adoption is significant, some industry experts, including Ju, caution that this trend alone may not be enough to propel Bitcoin’s price without additional catalysts. According to Ju, the broader market will need further developments, such as new institutional investments or regulatory clarity, to drive substantial price increases in major cryptocurrencies like Bitcoin (BTC).

Despite this, Pakman remains optimistic that the continued growth of stablecoins will drive the next phase of cryptocurrency adoption. He emphasized that the current market environment presents a unique opportunity for blockchain and DeFi platforms to thrive, particularly as more users and institutions begin to move their wealth on-chain.

For more information on the current state of the stablecoin market, you can check out Glassnode’s stablecoin supply data and IntoTheBlock's latest reports.