Stablecoin

when

USDC

Divergence

Stablecoins were a rare bright spot in an otherwise subdued crypto market in the first quarter, with supply growth and transaction activity pointing to sustained demand even as broader market conditions weakened.
Total stablecoin supply increased by roughly $8 billion to a record $315 billion in Q1, according to data from CEX.IO. Although this marked the slowest pace of expansion since Q4 of 2023, it still represented growth during a period when the wider crypto market contracted.
The data suggests investors rotated into stablecoins as a defensive strategy, boosting their share of overall market activity. Stablecoins accounted for 75% of total crypto trading volume during the quarter — the highest level on record.
<figure><img src="https://s3.cointelegraph.com/uploads/2026-04/019d4fe2-d9ad-788a-8e17-db998b13ea92.png" alt="Stablecoin supply reaches $315B in Q1 as USDC rises, USDT declines">
 <figcaption>Stablecoins’ share of total digital asset trading volume exceeded its 2022 peak. Source: <a href="https://blog.cex.io/ecosystem/q1-2026-stablecoin-report-35459" rel="noopener noreferrer nofollow">CEX.</a>IO
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At the same time, total stablecoin transaction volume topped $28 trillion, underscoring their growing role as the primary liquidity layer of the digital asset market. The figure extends a multi-year surge in activity, with stablecoin volumes in recent years <a href="https://cointelegraph.com/news/stablecoins-beat-visa-mastercard-2024-volume" rel="noopener noreferrer nofollow">exceeding those of major payment networks</a> like Visa and Mastercard combined.
However, data on underlying activity painted a more nuanced picture.
Retail-sized transfers — typically associated with individual users — declined by 16% in the first quarter, the steepest drop on record. In contrast, automated activity surged, with bots accounting for approximately 76% of all stablecoin transaction volume.
The shift toward <a href="https://cointelegraph.com/news/stablecoin-bot-activity-q3-2025" rel="noopener noreferrer nofollow">bot-driven flows</a> suggests that a growing share of stablecoin usage is tied to algorithmic trading, arbitrage and liquidity provisioning, rather than retail demand. While elevated automation can reflect more sophisticated or institutional participation, it may also signal weaker organic demand during bearish market conditions.&nbsp;
Related: <a href="https://cointelegraph.com/news/circle-stock-surges-bernstein-stablecoin-adoption" rel="noopener noreferrer nofollow">Circle shares surge as Bernstein sees upside from stablecoin adoption</a>
<h2 id="divergence-between-major-stablecoin-issuers">Divergence between major stablecoin issuers</h2>
One of the CEX.IO report’s key takeaways was a widening divergence between major stablecoin issuers. The supply of Circle’s USDC (<a rel="noopener noreferrer nofollow">USDC</a>) grew by roughly $2 billion in the first quarter, while Tether’s USDt (<a rel="noopener noreferrer nofollow">USDT</a>) declined by about $3 billion, marking the first notable split between the two since Q2 of 2022 amid the bear market.
The trend aligns with earlier Cointelegraph reporting, which highlighted <a href="https://cointelegraph.com/features/usdc-beats-tether-stablecoin-transfer-volume-1-8-trillion-all-time-high" rel="noopener noreferrer nofollow">a surge in USDC transfer activity</a> in February, pointing to increased usage across trading and onchain transactions. 
<figure><img src="https://s3.cointelegraph.com/uploads/2026-04/019d4fe2-dd84-7686-91cb-c44b3950a5e3.png" alt="Stablecoin supply reaches $315B in Q1 as USDC rises, USDT declines">
 <figcaption>USDC is now more widely used for “financial operations,” which include trading and onchain transactions. Source: CEX.io
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Beyond USDC, much of the growth in stablecoin issuance was driven by yield-bearing products — a segment that has <a href="https://cointelegraph.com/news/stablecoin-inflows-rebound-to-1-7b-as-washington-battles-over-yield-rules" rel="noopener noreferrer nofollow">drawn increasing scrutiny in the US</a>. Ongoing discussions around a crypto market structure bill in Congress have placed yield at the center of debate, with <a href="https://cointelegraph.com/news/lobby-bancario-esta-em-panico-com-stablecoins-que-oferecem-rendimento-diz-professor-da-nyu" rel="noopener noreferrer nofollow">traditional banks pushing back</a> against stablecoins that offer interest-like returns.
The market for yield-bearing stablecoins is currently valued at around $3.7 billion, with daily trading volumes exceeding $100 million, according to data from <a href="https://www.coingecko.com/en/categories/yield-bearing-stablecoins" rel="noopener noreferrer nofollow">CoinGecko</a>.
Related: <a href="https://cointelegraph.com/news/crypto-biz-stablecoin-regulation-institutions-ai-micropayments" rel="noopener noreferrer nofollow">Crypto Biz: Stablecoin jitters meet institutional momentum</a>

Stablecoin supply reaches $315B in Q1 as USDC rises, USDT declines

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