USDC Market Cap Surpasses $28 Billion as Institutional Investments Increase
The market capitalization of Circle’s USDC stablecoin has reached over $28 billion, driven by a resurgence in the USDC market and wider institutional investments. This growth has been fueled by an upturn in the general market and increased activity in non-U.S markets. According to a report from Coinbase, USDC has experienced a 14% increase since December 2023, adding $3.5 billion to its market capitalization.
Currently, the total market cap of USDC stands at $28.5 billion, with trading volumes reaching $8.6 billion. This represents a significant growth of 144% in the last 24 hours.
USDC’s Shifting Narrative
The narrative surrounding USDC has shifted after a period of decline in the first three quarters of 2023. The stablecoin faced challenges when it lost its dollar peg due to its exposure to Silicon Valley Bank (SVB). This resulted in USDC dropping as low as 87 cents and having only 8% of its reserve in SVB. However, it later regained its dollar peg and has since seen increased inflows into the market.
The report from Coinbase highlights that USDC is gaining a greater presence in non-U.S markets, particularly due to increasing derivatives activities on some exchanges. Since the start of 2023, USDC’s share of spot and derivatives activity has increased almost fivefold, although it still represents only 4% of total centralized exchange (CEX) volumes globally.
Circles Partnerships and Exchange Incentives
The launch of Coinbase International Exchange and a market maker incentive program have played a crucial role in driving the adoption of USDC in international markets. Coinbase’s Market Maker Program has provided liquidity and depth for a wide range of trading pairs in spot and perpetual offerings. Additionally, the re-listing of USDC on Binance, the largest centralized cryptocurrency exchange by volume, has further contributed to the stablecoin’s growth.
Circle, the issuer of USDC, has also formed partnerships with financial institutions in Japan and Singapore, expanding its presence in these markets.
USDC Outperforms Tether
In recent months, USDC has outpaced USDT, the largest stablecoin by market capitalization. While USDC has seen a 14% growth since December 1, USDT has only experienced an 8.7% increase. However, USDT still maintains its position as the leader in the stablecoin market with a 71% market dominance and a $97 billion market share.
The report suggests that USDT’s role in settling crypto derivatives like perpetual futures explains its wide reach. Around 83% of total centralized exchange volumes globally utilize USDT as the base currency for spot and futures trading.
Hot Take: Stablecoin Market Cap Reaches $140 Billion Amid Digital Asset Investments
The stablecoin market cap has surpassed $140 billion for the first time since 2022 as investments flow into digital assets following the approval of spot Bitcoin (BTC) exchange-traded funds (ETFs). This indicates growing interest and confidence in cryptocurrencies as a store of value and investment vehicle.
With Circle’s USDC leading the charge in non-U.S markets and experiencing significant growth, it is clear that stablecoins continue to play a crucial role in the crypto ecosystem. As institutional investments increase and more partnerships are formed, we can expect further developments and innovations in the stablecoin space.
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