Bots, Large Traders Dominate Stablecoin Volume, Visa Report Reveals

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The Essentials in Brief

A recently published report by Visa reveals that over 90% of stablecoin volume can be attributed to bot and large trader activity. Genuine user activity accounts for less than 10% of transaction volume. Despite massive growth in the stablecoin sector, mainstream adoption seems to be far off.

Stablecoins: Predominantly Dominated by Bots

Stablecoins, digital currencies whose value is tied to that of a stable asset like the U.S. dollar, are experiencing significant growth. Yet Visa’s recent report shows that the majority of this volume is not generated by real users, but by bots and large traders. In April, transactions worth about 2.2 trillion U.S. dollars were recorded, of which only 149 billion U.S. dollars were due to organic payment activities.

Comparison with the Traditional Payment Market

Compared to the 150 trillion U.S. dollar traditional payment market, the adoption of stablecoins as a means of payment is still in its infancy. Major payment processors like PayPal and Stripe have already entered the stablecoin market, highlighting the potential threat to traditional players like Visa. Nevertheless, the general opinion is that the mainstream adoption of stablecoin payments could still be some time away.

Market Development and Future Prospects

Despite the challenges, the stablecoin market continues to grow. With a market capitalization of 160 billion U.S. dollars and remarkable growth for leading stablecoins like DAI, USDT, and USDC. Analysts see the accumulation of stablecoins by large investors as a sign of strategic positioning in anticipation of favourable market conditions. Currently, Bitcoin is moving again in its 60,000 to 71,000 U.S. dollar range, which could set additional positive impulses for the stablecoin market.

Our Assessment

The report by Visa sheds new light on the use of stablecoins and underlines the need to increase actual user participation to achieve mainstream adoption. While the dominance of bots and large traders provides short-term liquidity and volume, the long-term health of the market depends on genuine, organic user activities. It remains to be seen how the market develops and what strategies will be applied to make the use of stablecoins more attractive to the average consumer.

Sources: Bloomberg, DeFiLlama

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