JPMorgan analysts have again lowered their forecasts for stablecoins, stating that this digital asset class cannot be considered in isolation from the overall crypto market, as their growth is closely linked. The bank warned that stablecoins are unlikely to reach the $1 trillion mark by 2028, calling their previous forecasts overly optimistic..
In the coming years, the stablecoin market is likely to continue to grow in line with the overall cryptocurrency market capitalization and could reach $500-$600 billion by 2028, which is far below the most optimistic forecasts of $2-4 trillion, the bank’s report says.
According to analysts at JPMorgan, the stablecoin market has grown by approximately $100 billion this year to exceed $300 billion, with most of the growth coming from the two largest coins: USDT from Tether and Circle’s USDC. The supply of the former increased by approximately $48 billion, while USDC’s supply increased by almost $34 billion.
The bank’s report states that in the past, stablecoin market growth accelerated during periods of growth in Bitcoin and Ethereum and slowed when the digital assets declined in price.
A July report from JPMorgan indicated that demand for stablecoins is largely driven by trading needs—they are used as cash or collateral in derivatives and decentralized finance markets, as well as for safekeeping. However, analysts now believe that the wider use of fiat-pegged assets for payments will not automatically lead to an increase in market capitalization, as higher velocity reduces the need for larger account balances.