Coinbase (COIN) highlighted in a research report on Monday that Circle’s USDC is experiencing a resurgence. The stablecoin is witnessing enhanced liquidity globally, with usage expanding rapidly beyond the borders of the United States. Consequently, there has been a notable surge in supply in recent months.
The supply of USD Coin (USDC), the second-largest stablecoin behind Tether (USDT), has seen significant growth recently, surging 14.3%, or $3.5 billion, since December 1, 2023.
This has brought USDC’s total market capitalization to $28 billion, though it still trails far behind USDT’s leading $98 billion market cap. However, USDC’s share of global centralized cryptocurrency exchange trade volumes has risen to 4%, indicating growing adoption and use.
Analysts attribute this resurgence in USDC to increased retail and institutional investor demand after the launch of spot bitcoin exchange-traded funds (ETFs) in late 2023. The ETFs brought more mainstream investors into crypto markets, boosting demand for major stablecoins like USDC as a haven amidst market volatility.Â
Strategic moves by USDC’s issuer Circle have also played a role, including the international expansion of trading services on platforms like Coinbase and the relisting of USDC trading pairs on major exchanges like Binance. This has significantly improved USDC’s liquidity and accessibility to investors globally.
While Tether remains the dominant stablecoin with nearly 4 times USDC’s market cap, USDC’s impressive growth signals an increasing market preference for alternatives. As Circle continues to expand its services globally, many analysts predict that USDC adoption will accelerate further, cementing its pivotal role in shaping the future infrastructure of digital asset markets.
Also Read: U.S. Financial Firms Favor Circle’s USDC Over Tether’s USDT
