As a veteran in the crypto space for eight years, I must uncover the magical truth of the stablecoin market in 2025 today — some use it to survive 200% inflation, while others, lured by the 'high-yield stability' gimmick, lose 80% in a single night! This generation of stablecoins is no longer as simple as 'digital cash' but a survival game caught between high-risk temptations and regulatory crackdowns, where ordinary investors can easily fall into traps.

1. Opening Strike: The 'Double Life' of Stablecoins

Standing on the streets of Buenos Aires, freelancers open their digital wallets the moment they receive their salary in pesos; in the electronic market of Lagos, importers tap their phones a few times, completing cross-border payments in minutes that banks take weeks to finalize — what supports them is the 'digital dollar' balance displayed on the screen.

Meanwhile, on global funding platforms, varieties claiming to 'peg to 1 USD' are experiencing terrifying drops: some fall from 1 USD to 0.24 USD within 24 hours, while others survive on tightropes with complex strategies. In 2024, the on-chain transaction volume of these assets soared to 27 trillion USD, surpassing the combined total of Visa and Mastercard, becoming the 'invisible blood vessels' of global finance, but will face the most severe shocks in 2025.

As an analyst with eight years of experience, I dare to assert: the 'wild era' of stablecoins has ended; now it is a life-and-death situation of 'either comply or go to zero.'

2. Two major traps: the death truth of high-yield stablecoins

1. Black box operation: The chain reaction that lost 93 million dollars

In the second half of 2025, the collapse of a 'yield-type stablecoin' (x series) exposed human greed in a stark manner. Its selling point was very tempting: 'hold to earn high interest, value stable as the dollar.' But the so-called 'complex arbitrage strategy' essentially magnifies the users' 160 million dollars in principal through circular lending by 4 times, handing it over to mysterious off-chain fund managers to operate — resulting in a loss of 93 million dollars, directly causing the coin price to plummet by 76%.

Even more lethal is the 'domino effect': another stablecoin (d series) used it as core collateral and was instantly dragged down, with a market value evaporating by 100 million dollars. This is not an accident but an inevitability — varieties without transparent reserves that rely on 'high interest' to attract funds are essentially Ponzi schemes; once the funding chain breaks, they will be countered.

2. Strategic type: 'Exquisitely fragile' dancing on a tightrope

Another popular stablecoin (U series) maintains its value through a 'Delta-neutral strategy' (buying spot + shorting futures) and makes a fortune during bull markets thanks to funding rates. However, in the market adjustment period of 2024-2025, funding rates frequently turn negative, meaning the platform not only does not make money but has to pay out of pocket. To maintain the 'high-yield' gimmick, it can only consume reserves to fill the gap.

I have always reminded fans: there is no 'free lunch' in the world. These types of strategic varieties may seem to have perfect mathematical models but are extremely dependent on market conditions. Once the liquidity of trading platforms tightens or rates remain negative for a long time, the balance of 'synthetic dollars' will be broken, and a death spiral may start at any time.

3. Regulatory iron fist: The 'compliance watershed' of 2025

In July 2025, the implementation of the U.S. (GENIUS Act) completely rewrote the rules for stablecoins. The core logic of this act is very clear: it recognizes the legal status of stablecoins but must be integrated into the existing financial system and cannot impact the foundations of banks.

Among them, the harshest 'yield ban' directly sentenced 'high-yield stablecoins' to death — if a certain digital cash can circulate like cash and provide a 5% interest, who would still deposit money in the bank? This would trigger a massive migration of deposits, endangering financial stability.

The consequences are direct: varieties focusing on 'native yield' have completely lost their survival space in the U.S. market. The market is forced to differentiate: compliant varieties must return to the essence of 'digital cash' — zero interest, transparency, and only for payments. This is good for ordinary investors: noise is reduced, and truly valuable varieties will surface.

Despite frequent risks and tightening regulations, the global adoption rate of stablecoins is skyrocketing. The reason is simple: for many, it is not an 'investment option' but a 'necessity for survival.'

1. 'Wealth hemostatic agent' under high inflation

Argentina's annual inflation rate exceeds 200%; holding local currency means wealth shrinks every day. For locals, converting wages into stablecoins is not an investment but a 'hemostatic measure' — this is the last line of defense against inflation.

Small and medium enterprises in Nigeria are more realistic: applying for dollars from banks takes weeks and incurs high fees; using stablecoins to pay for goods can be received in minutes, with transaction fees 80% lower than banks. From 2024 to 2025, the transaction volume of stablecoins in Nigeria reached nearly 22 billion dollars, which is the 'self-rescue' of countless enterprises to survive.

2. The 'turnaround' of traditional giants: from resistance to embrace

The most ironic change comes from traditional financial giants that once firmly resisted crypto assets:

  • Visa launched a new feature allowing global creators to directly receive stablecoin salaries in digital wallets;

  • Stripe spent 1.1 billion dollars to acquire a stablecoin infrastructure company, fully restoring crypto payments.

These giants do not care about 'decentralized faith,' only about efficiency: stablecoins are faster and cheaper than SWIFT and have become an irreplaceable underlying infrastructure. This also confirms my judgment: the core value of stablecoins is not 'speculating on coins,' but 'payment and hedging.'

5. Veteran's pitfall avoidance guide: How to choose stablecoins in 2025?

Combining eight years of experience, I give ordinary investors three core suggestions: stay away from traps and protect your principal:

  1. Firmly avoid 'high-yield temptations': any stablecoin claiming 'zero risk, high return' is essentially a trap. The core of compliant varieties is 'stability,' not 'yield'; if you want to manage wealth with it, you might as well buy low-risk bonds.

  1. Prioritize selecting 'transparent and compliant' varieties: focus on whether there are bank reserve proofs and whether they accept regulatory audits. Those hiding 'black box operations' and refusing to disclose the direction of funds should not be touched, no matter how hot they are;

  1. Beware of 'single strategy' varieties: stablecoins that overly rely on a specific arbitrage strategy or collateral have extremely poor risk resistance. Once the market environment changes, it is easy to trigger a chain reaction; it is better to choose varieties with diversified collateral and stable strategies.

6. Conclusion: The endgame of stablecoins — the 'digital evolution' of the dollar

The reshuffling of stablecoins in 2025 is not the end of the industry, but the beginning of 'retaining the genuine while eliminating the false.' Those who try to make money with the gimmick of 'stability' will be eliminated, and those who survive will be 'digital cash' that returns to the essence of payment and is compliant and transparent.

This transformation proves: the dollar has not been overturned but has completed self-renewal through code. For ordinary investors, abandoning the illusion of 'making quick money with stablecoins' and recognizing their core value of 'hedging and payment' is essential to stand firm in this financial transformation.

Remember: In the encryption market, 'stability' has never been innate but is supported by compliance, transparency, and real demand. Only those who can protect their principal will be the ultimate winners. $BTC

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