JPMorgan: Rising Stablecoin Velocity May Limit Market Cap Growth Despite Increased Usage

According to JPMorgan analysts led by managing director Nikolaos Panigirtzoglou, rising stablecoin velocity may constrain market capitalization growth even as usage accelerates. Velocity—how frequently the same stablecoin is used in transactions—has increased sharply over the past year, meaning the same amount of stablecoins can process significantly more transactions.

Stablecoin market cap has grown nearly $100 billion over the past year to above $300 billion when including yield-bearing stablecoins. Onchain transaction volume is estimated at an annual pace of $17.2 trillion this year. However, the analysts said higher velocity would likely limit stablecoin supply expansion going forward, even if payment adoption rises exponentially.