USDC Gains Momentum in the Crypto Market
The crypto market is experiencing a significant increase in the popularity of USDC, the second-largest stablecoin by market capitalization. According to data from Kaiko market, USDC’s volume market share on centralized exchanges (CEX) has more than doubled since January 2022.
Increase in Market Share Despite Previous Challenges
This growth is noteworthy considering the decline in USDC activity during the first half of 2023 due to the ongoing crypto bear market. Additionally, Binance, the world’s largest crypto exchange, delisted USDC during this period to concentrate liquidity and boost market share for their own stablecoin, BUSD.
Binance’s Decision Boosts USDC’s Recovery
Despite being delisted from Binance, Jeremy Allaire, CEO of Circle (the company behind USDC), stated that this move would actually be beneficial for USDC. He believed that it would lead to more USDC flowing into Binance. Less than a year later, Binance relisted USDC, resulting in a significant increase in its market share on CEXes.
Influence of Market Recovery and DeFi Activity
USDC’s trading activity gained momentum in late Q3 2023, coinciding with the overall market recovery and the rise of major cryptocurrencies like Bitcoin, Ethereum, and Solana. The surge in USDC and stablecoin activity also aligns with the resurgence of decentralized finance (DeFi) trading volume, which now exceeds $56 billion.
Solana Adoption Contributes to Growth
In addition to Binance’s relisting, USDC’s growth can be attributed to its increasing adoption on Solana, a high-performance blockchain network. In early 2024, data from Artemis revealed that USDC transaction volume on Solana surpassed that of USDT on Tron, signaling a significant shift in the stablecoin landscape.
Despite Tron being known for its stablecoin-driven ecosystem, USDC has become the preferred stablecoin on Solana. According to Artemis data, there has been a surge in on-chain activity related to USDC, leading to a more than 11-fold increase in trading volume in the past three months alone.
Hot Take: USDC’s Resurgence Indicates Growing Demand
The recent surge in USDC’s market share and trading activity highlights the growing demand for stablecoins, particularly in the context of market recovery and increased DeFi activity. The delisting and subsequent relisting on Binance played a significant role in boosting USDC’s presence on centralized exchanges. Additionally, its adoption on Solana has further propelled its growth. As the crypto market continues to evolve, stablecoins like USDC are becoming essential tools for traders and investors seeking stability amidst volatility.
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