Avalanche (AVAX) Saw a Significant Surge in Stablecoin Supply Over the Past Year

The stablecoin supply on the Avalanche network rose by over 70% over the past year, from $1.5 billion in March 2024, to over $2.5 billion as of March 31, 2025

Avalanche saw a significant surge in stablecoin supply over the past year, but the onchain deployment of this capital points to passive investor behavior, which may be limiting demand for the network’s utility token.

The stablecoin supply on the Avalanche network rose by over 70% over the past year, according to Avalanche’s X post.

This is a huge influx of capital that could potentially increase demand for the network’s native token, AVAX. However, AVAXUSD has been largely in a downtrend, dropping nearly 60% over the past year.

Stablecoins are the main bridge between the fiat and crypto world and increasing stablecoin supply is often seen as a signal for incoming buying pressure and growing investor appetite.

However, onchain data from IntoTheBlock suggests that this capital is not being deployed to generate network activity, which may be limiting the need for the AVAX token.

“The apparent contradiction between surging stablecoin value on Avalanche and AVAX's significant price decline likely stems from how that stablecoin liquidity is being held and used,” said Juan Pellicer, senior research analyst at IntoTheBlock crypto intelligence platform.

A “substantial portion” of these inflows consists of bridged Tether (USDT), the research analyst told Cointelegraph, adding:

This capital is largely passive and serves as a store of value rather than being deployed to generate network activity, which could increase demand for the AVAX token.

The lack of onchain activity in turn limits the need for gas fees, which are paid in the network’s native token.

The AVAX token’s downtrend comes during a wider crypto market correction, as investor sentiment is pressured by global uncertainty ahead of US President Donald Trump’s reciprocal import tariff announcement on April 2, a measure aimed at reducing the country’s estimated trade deficit of $1.2 trillion.

70% chance for crypto market to bottom by June: Nansen analysts

According to Nansen analysts, there’s a 70% chance that the crypto market will bottom in the next two months leading into June as the ongoing tariff-related negotiations progress and investor concerns are alleviated.

“Once the toughest part of the negotiation is behind us, we see a cleaner opportunity for crypto and risk assets to finally mark a bottom,” Aurelie Barthere, principal research analyst at the Nansen crypto intelligence platform, told Cointelegraph.

Both traditional and cryptocurrency markets continue to lack upside momentum ahead of the US tariff announcement.

“For the main US equity indexes and for BTC, the respective price charts failed to resurface above their 200-day moving averages significantly, while lower-lookback price moving averages are falling,” wrote Nansen in an April 1 research report.