A recent report from JPMorgan has tempered the optimistic outlook for stablecoin market capitalization growth. While the usage of stablecoins continues to surge, the bank warns that the total market cap will not expand at the same pace, largely due to a structural shift in how stablecoins circulate.
Velocity Effect: Same Capital, More Transactions
The report highlights a key concept: stablecoin velocity. As stablecoins are increasingly used for payments, cross-border transfers, and DeFi protocols, the same unit of stablecoin is being reused multiple times within a given period. This improved efficiency means that the overall market cap does not need to grow proportionally with transaction volume. In other words, faster velocity reduces the demand for newly minted tokens to accommodate growing usage.
2028 Market Cap Forecast: $500-600 Billion
Based on current trends, JPMorgan estimates that the total stablecoin market capitalization will reach between $500 billion and $600 billion by 2028. This projection stands in stark contrast to more bullish predictions of a $1 trillion market within the same timeframe, which the bank deems overly optimistic. The report cautions that many analysts fail to account for the dampening effect of velocity on capital requirements.
The bank acknowledges that higher velocity is a sign of real-world adoption, particularly in merchant payments and remittances. Stablecoins are moving beyond mere trading pairs and becoming a medium of exchange. However, the financial institution advises investors to focus on usage metrics rather than raw market cap growth when evaluating the health of the stablecoin ecosystem.
Notably, the stablecoin index STABLE has recorded a gain of +10.73% recently, indicating continued investor interest. Yet JPMorgan's analysis suggests that market cap expansion will be more measured, and that a trillion-dollar stablecoin market remains a distant milestone without a significant reduction in velocity or a massive inflow of new collateral assets.