Key Takeaways:
- Stablecoins expanded by over $30B despite a brutal Q1 for broader crypto markets.
- Bitcoin showed relative strength, but Ethereum and other altcoins plummeted.
- Tokenized assets and stablecoins demonstrated real-world utility, defying the downturn.
The opening quarter of 2025 was a stark reminder that optimism alone can’t sustain a rally. Major cryptos buckled under selling pressure, with Ethereum suffering a crushing setback of close to 50% while Bitcoin, in a display of relative resilience, fell by 15%.
This bearish momentum ran in tandem with a swift change in the macroeconomic sentiment: from hope for regulatory reforms to fear of trade tensions and the prospect of higher tariffs.
Crypto commentator Jordan Hale explained that sentiment in the second half of 2024 grew “too eager in its optimism,” leading to unsustainable momentum. He explained that favorable headlines, such as the U.S. SEC rejecting a number of headline-grabbing lawsuits and overturning SAB 121 to allow for bank custody of tokens, were mostly already factored in.
Crypto Falls with Markets, Stablecoins Hold Strong
So when sentiment in the wider macro environment grew cautious, risk assets such as crypto couldn’t maintain the line. Greater correlation with equities also meant once stock markets were retreating, digital assets also dropped, exacerbating the decline.
Whereas most digital assets suffered, stablecoins were unmoved, surpassing $220 billion in total issuance. This achievement attests to maturing financial utility in crypto, as investors and institutions increasingly use stablecoins for cross-border payments, settlements, and dollar exposures in turbulent markets.
Tether again held a firm grasp at a new peak of $140B market cap, but USDC enjoyed its own success, gaining 7% in market share and laying the groundwork for its future IPO.
Even emerging players such as PayPal’s PYUSD and Ripple’s RLUSD started gaining a footing, adding close to a quarter-billion in market cap each. Decentralized plays like Ethena’s USDe, though, were struggling with declining DeFi returns as well as investors gravitating toward centralized issuers.
Real-World Assets Signal Crypto’s Growing Utility
However, on-chain activity hit all-time highs, over $3 trillion in stablecoin activity by Ethereum Mainnet alone, resulting in over 200,000 unique users per day. Tether itself handled 20 million weekly transactions in its top seven supported chains.
Its parent companies, ranked as one of the highest-profit private firms in the world in 2024, employed the funds from Q1 earnings to quietly stockpile close to 9,000 additional BTC, resulting in a total of 100,000.
Next to stablecoins, real-world assets (RWAs) crossed the historical milestone of $10 billion in supplied capital. Tokenized US treasuries were the main asset in this category, earning yield and utility that find parallels in traditional financial products.
BlackRock was a clear standout in this segment with $2B in its BUIDL token, while CEO Larry Fink remains a strong proponent of large RWA adoption.
Nonetheless, Coinbase’s plans to tokenize its own stock (COIN) on the Base layer suggest a wider wave of tokenization of equities. Regulation in the pipeline, RWAs, and stablecoins are demonstrating that even in corrections, crypto is not simply a matter of price; it’s a matter of forging real, scalable infrastructure.
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