Increased stablecoin use on this major blockchain is happening because of network scalability improvements and rising demand for decentralized finance (DeFi).
Ethereum (ETH) is targeting a price increase beyond $2,000, driven by record-high stablecoin activity on its network.
Ethereum’s Layer 2 networks now offer transaction costs similar to Solana, making the platform more affordable.
This increased affordability, combined with growing developer and market confidence, sets the stage for a potential Ethereum price rally.
Stablecoin Activity on Ethereum Reaches New Peak
Stablecoins, cryptocurrencies linked to traditional currencies like the US dollar, are increasingly used on Ethereum.
These digital assets are vital for many blockchain applications, especially in DeFi.
Ethereum currently leads the stablecoin market, with over $123 billion of these tokens circulating on its network.
This total is a large jump from the $22 billion seen in early 2021, showing Ethereum’s importance in DeFi.
The total stablecoin market now hits a record $227 billion, rising by $2.94 billion in just one day.
Cryptorank data shows Ethereum processed $1.18 trillion in stablecoin transfers, the highest volume ever recorded on the network.
In comparison, October 2024 saw $556 billion in stablecoin transfers on Ethereum, half of the current volume.
Data from Cryptorank also indicates Ethereum surpassed competitor Tron by $605 billion in total stablecoins processed.
This growth shows rising demand for stable assets, particularly during market volatility or uncertainty.
Increased stablecoin activity on Ethereum signals growing investor trust in the platform’s ability to handle high transaction volumes, even with price volatility.
Ethereum Price Poised for Potential Rise
The increasing use of stablecoins is expected to positively impact Ethereum’s price.
Ethereum’s Layer 2 networks, like Arbitrum and zkSync, reduced transaction costs to under $0.01.
In a competitive blockchain environment, this makes Ethereum a more affordable option for smaller, frequent transactions.
As more decentralized apps (dApps) with stablecoin pools develop on these Layer 2 networks, demand for Ethereum could increase.
Many analysts have a positive outlook for Ethereum, predicting a potential breakout in price.
Crypto analyst CryptoELITES projects a bullish price path for Ethereum, forecasting a $5,000 target by May 2025.
This prediction comes as increased user activity and on-chain whale movement suggest a significant market shift.
ETH currently trades well below this level.
At the time of writing, the spot price was $1,642.84, following a 4.65% increase.
While the $5,000 breakout is a longer-term prediction, a more realistic short-term target is $2,000.
On-Chain Metrics Support Ethereum Growth
Ethereum’s on-chain activity displays strong growth signs, which may further support its price.
Beyond stablecoins, the amount of Ethereum held on exchanges is also decreasing.
Glassnode data indicates the percentage of Ethereum on exchanges fell from 24% in 2022 to below 13% by April 2025.
This reduced Ethereum supply on exchanges could strain availability and potentially cause a price rally.
Ethereum’s active developer community also plays a key role.
Over 1,385 developers are currently working on Ethereum’s Layer 2 solutions.
Ethereum’s core contributors have set May 7, 2025, as the deployment date for the Pectra upgrade, following successful tests on the Holesky and Hoodi testnets.
This upcoming upgrade may stimulate more on-chain activity and growth, further increasing Ethereum’s market value.
