Avalanche has experienced a 70% increase in stablecoin supply over the past year, rising from $1.5 billion in March 2024 to over $2.5 billion as of March 31, 2025. Despite this growth in liquidity, the price of AVAX, Avalanche's utility token, has significantly dropped by nearly 60%, trading above $19. Analysts suggest that the increase in stablecoins does not correlate with active deployment in decentralized finance (DeFi) on the platform. Many stablecoins, particularly Tether, are being held inactive rather than being utilized in lending or trading, which limits demand for AVAX. The decline in AVAX prices is also reflected in the wider crypto market undergoing correction, compounded by uncertain global economic conditions. Experts predict that the market may find its bottom by June, contingent upon developments in U.S. tariff negotiations, which are currently creating investor apprehension about the cryptocurrency landscape.

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