Crypto Correction Hits as Stablecoins and DEXs Surge

Happy Monday, TM Family!

Welcome to the Token Metrics Research, Daily Newsletter, where we cover key market movements, regulatory updates, and early alpha for our readers and investors. 

Let’s dive in! 

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Now let’s get back to the key stories of the day.

The cryptocurrency market faced a correction over the weekend, with the total market capitalization and leading assets experiencing declines. Bitcoin, the market leader, saw a drop of approximately 2.57%, falling from $105,875 to $103,156. This correction was largely attributed to tariff-related uncertainties, which triggered nearly $1B in liquidations across the market, including $358.6M in net outflows from U.S. spot Bitcoin ETFs, ending a 10-day streak of positive inflows totaling $4.26B.

Despite this short-term volatility, Bitcoin’s monthly close for May 2025 was $104,638.09, a significant increase from $67,489.61 in May 2024, reflecting a year-over-year growth of over 55%. The Token Metrics market indicator has shifted to a bearish outlook, suggesting potential further downturns in the near term. This aligns with analyst warnings of an overheated market, with Bitcoin stalling around $105,000.

Metaplanet, the Tokyo-based firm, continued its aggressive Bitcoin accumulation strategy, acquiring an additional 1,088 BTC for $117.5M at an average price of $108,051 per BTC. This brings their total holdings to 8,888 BTC, valued at over $930M, positioning Metaplanet as the 8th largest corporate Bitcoin holder globally. The firm’s year-to-date BTC yield stands at 66.3%, with a goal to reach 10,000 BTC by year-end.

The stablecoin market achieved a historic milestone, surpassing $250B in market capitalization, currently standing at $250.3B, with U.S. dollar-backed stablecoins accounting for $245.5B. Tether’s USDT dominates with a market cap of $153B, followed by Circle’s USDC at $60.9B. This growth is driven by increasing regulatory clarity and the rising adoption of decentralized finance (DeFi).

Key legislative developments are supporting this expansion. In the U.S., the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) has advanced, mandating that stablecoins be fully backed by U.S. dollars or highly liquid assets and requiring annual audits for issuers with over $50B in market cap.

Hong Kong passed a stablecoin bill on May 21, establishing a licensing regime for fiat-backed stablecoin issuers. These regulatory frameworks are fostering trust and encouraging institutional participation. The DeFi sector, closely tied to stablecoins, has seen its total value locked (TVL) exceed $111B, reflecting growing confidence in decentralized financial systems.

Decentralized exchanges (DEXs) marked a significant milestone in May 2025, capturing a record 25% share of global spot trading volume compared to centralized exchanges (CEXs), with a total DEX spot trade volume of $410.2B.

PancakeSwap led with $171.6B in volume, followed by Aerodrome and PumpSwap, each contributing nearly $15B. This surpasses the previous high of 20% in January 2025, indicating a growing preference for decentralized platforms due to their transparency and self-custody features.

On-chain activity supports this trend, with DeFi’s total value locked surpassing $111B, reflecting increased user engagement and trust in decentralized systems. Transaction volumes on-chain have also risen, with users increasingly favoring DEXs for asset management and trading, highlighting a shift toward decentralized control.

That’s all for today, people. Let’s talk tomorrow.

Your Friends at Token Metrics