Circle’s USDC has seen its market capitalization surpass $28 billion, experiencing a steady rise since Q4 2023, driven by increased institutional investments.
According to a recent report from Coinbase, there has been a notable revival in the USDC market, coinciding with the broader market uptrend and expansion into non-U.S. markets.
The market cap for stablecoins is rising… and USDC is outperforming – up over 14% since December. Learn why this may mark a new resurgence in USDC in our new stablecoin deep dive: https://t.co/RD8X8RD7Pr pic.twitter.com/RqMRwvEG75
— Coinbase Institutional 🛡️ (@CoinbaseInsto) February 27, 2024
As per the report, the USDC stablecoin has increased by $3.5 billion, representing a growth of over 14% since December 1, 2023. This significant surge propelled the asset’s market capitalization above $28 billion.
Currently, the asset boasts a total market capitalization of $28.5 billion, accompanied by trading volumes of $8.6 billion, marking a notable 144% surge within the last 24 hours.
The narrative surrounding USDC has undergone a slight shift, having experienced declines in the initial three quarters of 2023 before stabilizing in the final quarter.
These fluctuations were attributed to the asset’s deviation from its dollar peg following revelations of a $3.3 billion exposure to Silicon Valley Bank (SVB) in March.
USDC plummeted to as low as 87 cents, with approximately 8% of its reserve tied to SVB, before subsequently re-establishing its dollar peg. The recent influx of capital into the markets has contributed to heightened trading activities surrounding the asset.
According to the report, the stablecoin’s presence has seen a significant increase outside the United States, particularly amid growing derivatives activities on various exchanges.
“That’s starting to change, as USDC is gaining a greater presence in non-US markets. Since the start of 2023, USDC’s share of spot and derivatives activity has increased by almost 5x, albeit to a still-low 4% of total CEX volumes globally.”
Expansion of USDC Adoption in International Markets
The introduction of the Coinbase International Exchange, coupled with a market maker incentive program, has significantly propelled the adoption of USDC in global markets. The Coinbase Market Maker Program has played a crucial role in providing liquidity and depth across a broad spectrum of trading pairs, spanning both spot and perpetual offerings.
Additionally, the relisting of USDC on Binance, the world’s largest centralized cryptocurrency exchange by volume, has further accelerated the stablecoin’s growth trajectory.
Throughout December, the asset’s market share on centralized exchanges witnessed a notable 10% uptick, driven by Coinbase’s decision to raise interest rates on the asset. This move has incentivized cryptocurrency users to hold USDC for extended durations.
Moreover, Circle, the issuer of USDC, has forged numerous partnerships with financial institutions in key markets such as Japan and Singapore, bolstering the stablecoin’s presence and accessibility in these regions.
USDC Surpasses USDT in Recent Growth Trends
In recent months, the growth of USDC has surpassed that of USDT, the leading stablecoin by market capitalization. While USDC has recorded a significant 14% increase, USDT has posted a comparatively lower growth rate of 8.7% since December 1.
Despite USDC’s notable surge, USDT continues to maintain its position as the dominant stablecoin in the market. With a commanding 71% market dominance and a staggering market share of $97 billion, USDT remains the clear leader in the stablecoin landscape.
“USDT’s role in settling crypto derivatives like perpetual futures (which are almost exclusively traded outside of the US) partly explains the breadth of USDT’s reach. Indeed, around 83% of total centralized exchange volumes globally (both spot and futures) currently utilize USDT as the base currency.”
For the first time since 2022, the market capitalization of stablecoins reached $140 billion, driven by a gradual influx of investments into digital assets subsequent to the approval of spot Bitcoin (BTC) ETFs.
