PYUSD’s Rise to $1 Billion Comes with a Catch: 90% Controlled by Whales

PayPal’s PYUSD stablecoin is approaching a $1 billion market cap, doubling since the start of 2025. This recovery comes amid an increasingly competitive stablecoin market, with many new entrants backed by major financial institutions.

However, PYUSD adoption remains low overall, and its supply is highly concentrated.

PYUSD Market Cap Doubles Since Early 2025

Launched in Q3 2023, PayPal’s PYUSD stablecoin initially struggled with limited adoption despite the early hype. Its market cap dropped by nearly half. But the market environment in 2025 has shifted. Growing demand and rising trust in stablecoins have helped PYUSD regain momentum.

According to data from BeInCrypto, PYUSD’s market cap reached $984 million by June. This is up from $490 million at the beginning of the year. At this pace, PYUSD could soon surpass its previous $1 billion peak from August 2024.

Token Terminal data also shows strong growth in PYUSD’s circulating supply across both Ethereum and Solana blockchains. This marks a key milestone in PayPal’s expansion strategy into decentralized finance (DeFi). Token Terminal hints at potential for 10x more market cap growth.

“PayPal’s PYUSD hits $1 billion in outstanding supply ~2 years from launch. How will it take to scale from $1 to $10 billion?” – Token Terminal said.

The US Securities and Exchange Commission (SEC) also recently concluded its investigation into PYUSD. The closure of the case helped ease concerns among PYUSD holders.

Moreover, PayPal has joined the stablecoin yield race. It now offers a 3.7% annual return on PYUSD. Meanwhile, BeInCrypto reported that the market cap for yield-bearing stablecoins surpassed $10 billion in 2025.

PYUSD Supply Is Concentrated in the Hands of Whales

Despite the growth, the concentration of PYUSD among large holders raises concerns about liquidity and stability.

Data from CoinMarketCap shows that whale wallets holding more than 1% of PYUSD supply control nearly 91% of the total. Dune Analytics data reveals that the top 5 PYUSD wallets hold over $820 million, or more than 80% of the supply.

A similar issue affects USD1, the newly launched and controversial stablecoin from World Liberty Financial. According to Kaiko, over half of USD1’s liquidity comes from just three wallets.

This raises questions about genuine market demand. Many new stablecoins rely on wallets linked to their development teams rather than actual user adoption.

Still, lawmakers remain optimistic about stablecoins. Treasury Secretary Scott Bessent recently projected that USD-backed stablecoins could exceed $2 trillion in market cap by 2028.

Meanwhile, the US Senate has passed the GENIUS Act, signaling bipartisan support for its new amendments.