Bot Activity Accounts for 71% of Q3 Stablecoin Transactions, CEX.io Reports

Executive Summary

New research from crypto exchange CEX.io reveals that automated trading bots were responsible for 71% of stablecoin transactions in the third quarter of 2025. This activity contributed to a record $15.6 trillion in stablecoin transfers, yet raises significant questions regarding genuine market adoption and transparency. Organic, non-bot activity accounted for only 20% of this volume, while the remaining 9% derived from internal smart contract and intra-exchange operations. The findings prompt calls for enhanced regulatory clarity to distinguish between programmatic and real-world economic usage within the stablecoin ecosystem.

The Event in Detail

CEX.io's market research analyst, Illya Otychenko, characterized Q3 2025 as the most active period for stablecoins, with transfers totaling an unprecedented $15.6 trillion. Calculations, utilizing data from Visa/Allium and Artemis, indicated that a dominant 71% of this volume stemmed from bot-driven transfers. Organic non-bot activity represented approximately 20% of the total, with 9% attributed to smart contract transactions and internal exchange operations. Otychenko clarified that the 71% figure encompasses various bot activities, including high-frequency trading and manipulative practices such as wash trading. Maximal extractable value (MEV) bots and those engaging with decentralized finance (DeFi) protocols comprised less than half of this overall bot-driven volume, suggesting that a substantial portion of the activity may not reflect meaningful economic engagement.

Market Implications

The prominence of bot-driven activity introduces a layer of complexity to the interpretation of stablecoin adoption metrics, potentially fostering skepticism regarding overall market health. Regulators are likely to increase their focus on market manipulation and transparency within the stablecoin sector. Despite the significant bot influence, retail-sized stablecoin transfers, defined as those under $250, reached new all-time highs in Q3 2025, positioning the year as a record for retail stablecoin usage. Concurrently, stablecoin net inflows demonstrated substantial growth, surging by 324% from Q2 to Q3 2025, reaching $45.6 billion. The overall stablecoin market capitalization increased by over 5% to $296.967 billion. Tether (USDT) led these inflows with $19.6 billion, followed by Circle (USDC) with $12.3 billion, and Ethena USDe with $9 billion. However, alongside these positive trends, on-chain data also indicated a 22.6% decline in monthly active addresses to 26 million and an 11% drop in monthly transfer volume to $3.17 trillion from the previous month, suggesting a nuanced picture of market engagement.

Expert Commentary

Illya Otychenko emphasized the critical need for policymakers to accurately distinguish between bot activity and genuine user engagement when assessing systemic risk and real-world adoption of stablecoins. He noted that unlabeled high-frequency bots, characterized by over 1,000 monthly transactions and $10 million in monthly volume, predominantly contributed to the observed 71% figure. This highlights a significant challenge in gauging true market demand and usage. The issue of artificial volume is further detailed by Chainalysis, whose 2024 report outlines methodologies for detecting suspicious trading patterns. Using two primary heuristics, Chainalysis identified a potential wash trading volume of approximately $704 million (0.035% of total DEX trade volume in November 2024) and $1.87 billion (0.046% of total DEX volume in November 2024) across Ethereum, BNB Smart Chain, and Base, respectively. These figures, totaling an upper bound estimate of $2.57 billion, underscore the pervasive nature of non-economic activity in crypto markets.

Broader Context

The revelation of high bot activity coincides with intensified global regulatory scrutiny on stablecoins. The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) are actively advocating for a ban on multi-issuance stablecoins within the European Union, a move that could significantly impact major issuers such as Circle and Paxos. Concerns revolve around potential redemption risks during market instability, where local reserves might be overwhelmed while foreign-held reserves remain inaccessible. ECB President Christine Lagarde has articulated worries that the current MiCA framework may contain gaps exposing the bloc to systemic risks. This regulatory push, juxtaposed with the dominance of dollar-pegged stablecoins (99% of the $230 billion global market versus 0.15% for euro-backed tokens), further complicates the landscape. The findings from CEX.io thus contribute to a broader narrative of an evolving stablecoin market characterized by both genuine organic growth and substantial automated activity, demanding robust frameworks for accurate assessment and oversight.