Avalanche stablecoins up 70% to $2.5B, AVAX demand lacks DeFi deployment

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Avalanche saw a important surge successful stablecoin proviso implicit the past year, but the onchain deployment of this superior points to passive capitalist behavior, which whitethorn beryllium limiting request for the network’s inferior token.

The stablecoin proviso connected the Avalanche web roseate by implicit 70% implicit the past year, from $1.5 cardinal successful March 2024, to implicit $2.5 cardinal arsenic of March 31, 2025, according to Avalanche’s X pos

Stablecoins are the main span betwixt the fiat and crypto satellite and increasing stablecoin supply is often seen arsenic a awesome for incoming buying unit and increasing capitalist appetite.

However, Avalanche’s (AVAX) token has been successful a downtrend, dropping astir 60% implicit the past twelvemonth to commercialized supra $19 arsenic of 12:31 p.m. UTC, contempt the $1 cardinal summation successful stablecoin supply, Cointelegraph Markets Pro information shows.

“The evident contradiction betwixt surging stablecoin worth connected Avalanche and AVAX's important terms diminution apt stems from however that stablecoin liquidity is being held,” according to Juan Pellicer, elder probe expert astatine IntoTheBlock crypto quality platform.

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

“This seems arsenic inactive treasury holdings alternatively than superior actively deployed wrong Avalanche's DeFi ecosystem (at slightest for the clip being). If these stablecoins aren't being utilized successful lending, swapping, oregon different DeFi activities that would typically thrust request for AVAX (for gas, collateral, etc.), their beingness unsocial wouldn't needfully boost the AVAX price”

The AVAX token’s downtrend comes during a wider crypto marketplace correction, arsenic capitalist sentiment is pressured by planetary uncertainty up of US President Donald Trump’s reciprocal import tariff announcement connected April 2, a measurement aimed astatine reducing the country’s estimated commercialized shortage of $1.2 trillion.

70% accidental for crypto marketplace to bottommost by June: Nansen analysts

Nansen analysts foretell a 70% accidental that the crypto marketplace volition bottom successful the adjacent 2 months starring into June arsenic the ongoing tariff-related negotiations advancement and capitalist concerns are alleviated.

“Once the toughest portion of the dialog is down us, we spot a cleaner accidental for crypto and hazard assets to yet people a bottom,” Aurelie Barthere, main probe expert astatine the Nansen crypto quality platform, told Cointelegraph.

Both accepted and cryptocurrency markets proceed to deficiency upside momentum up of the US tariff announcement.

“For the main US equity indexes and for BTC, the respective terms charts failed to resurface supra their 200-day moving averages significantly, portion lower-lookback terms moving averages are falling,” wrote Nansen successful an April 1 probe report.