90% of Stablecoin Activity Involves Bots: Visa Reports

Visa says most stablecoin transactions are bots, but market cap remains steady while user numbers rise, with some predicting stablecoins could surpass Visa's volume soon.
90% of Stablecoin Activity Involves Bots: Visa Reports

Key Insights

  • A new report by Visa and Allium Labs suggests that less than 10% of transactions involve actual people.

  • Visa claims much of the reported $2.2 trillion in April transactions were influenced by bots and traders, not everyday users.

  • Despite the "noise," the stablecoin market cap remains between $150-$160 million, with Tether (USDT) and USD Coin (USDC) leading the way.

  • Visa's study also shows a rise in monthly active users, reaching 27.5 million across various chains.

  • While Visa downplays transaction volume, research firm Sacra predicts stablecoins could surpass Visa's volume in Q2 2024.

It turns out that the stablecoin market may not be as big as we thought—at least according to Visa and Allium Labs’ most recent report.

Insights from this report show that a mere fraction of all stablecoin transactions come from human activity.

As reported by Bloomberg, less than 10% of all stablecoin transactions are organic, or from real user interaction.

The Numbers Don’t Lie—Or Do They?

Cuy Sheffield, Visa’s head of crypto, suggested in a recent X thread that most stablecoin transactions are influenced by “a lot of noise,”.

Data from Sheffield and Visa’s reports suggest that in April 2024 alone, the stablecoin market processed a staggering $2.2 trillion worth of transactions.

<div class="paragraphs"><p>Noise in stablecoin data</p></div>

Noise in stablecoin data

These transactions, however, may have been flukes, because only about $265 billion of the total came from actual payment activity—from actual people.

Visa reports that its findings come from filtering out bot-influenced and large-scale trader transactions to figure out how many individuals are moving and what amount.

Dominance in the Stablecoin Arena

According to CoinMarketCap, the current stablecoin market cap sits between the $150 million to $160 million mark.

<div class="paragraphs"><p>Stablecoins by market cap</p></div>

Stablecoins by market cap

CoinMarketCap data also shows that Tether's USDT and Circle's USDC lead the rest, with a combined market dominance of more than 90% (75% from USDT and 22% from USDC).

The market cap of his niche of cryptos has only grown recently, with major players like PayPal entering the fray, and the regulatory environment around stablecoins in the US is still in its development phases.

However, Sheffield also points out that all of the “noise” from this market exists because stablecoin transactions can be executed both manually and through bots, making it harder to track the market.

Stablecoin Market Is Growing

Despite the issues with tracking and monitoring the stablecoin market, Visa's study still shows that there is an ongoing rise in the number of monthly active stablecoin users, with a total of around 27.5 million users across various chains.

Moreover, according to Pranav Sood, an executive at Airwallex, the stablecoin market still has a lot of room for growth, considering how it is still in its early stages of development as a payment avenue.

This is without mentioning how research firm, Sacra, in its most recent report, predicts that despite the "noise" Visa speaks of, stablecoins will "eclipse" it in terms of total payments volume in the second quarter of 2024.

<div class="paragraphs"><p>Sablecoins bigger than Visa</p></div>

Sablecoins bigger than Visa

Overall, as the stablecoin market continues to evolve into the financial landscape of both crypto and TradFi, the actual scale of their use by individuals remains a topic under heated debate.

This emphasizes the need for more refined data analytics, to better understand the market and provide a safe environment for investors and traders alike.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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