Circle has published a report titled State of the USDC Economy. The goal is to talk about how far stablecoin has come since its inception in 2018. A few months of the previous year, that is, 2023, were pretty hard on its market cap, especially with a drop of ~60% that brought the value down to $24 billion from $56 billion. However, the market cap is reportedly rising again, and USDC could start doing well in the coming months.
Currently, it is behind USDT and is sitting in the seventh position among all other digital assets. That does not make it any less desirable for trade and holding purposes, considering USDC is still pegged 1:1 to the US Dollar.
What has changed is the usage of the stablecoin for leveraged trading. The 23-page report has said that usage is dwindling, with a fall of 90% in terms of leverage in the last 3–4 years, that is, from 2019. That has had little impact on users accessing USDC to send value. The report cites that approximately $12 trillion has been exchanged in value since the time it was launched.
There has been a rise in the number of wallets holding USDC with a value of more than $10. One would come across almost 2.7 million such wallets, a rise of 59% in the previous year. The network will back over 595 million transactions until the end of November 2023.
The stablecoin’s market cap peaked in June 2022, with a value of $56 billion. There is a drop to $24 billion, but Circle is confident there will be an inevitable rise in 2024. An estimated figure could not be located in reports, but that still does not belittle efforts being invested to revive the community of Circle based on market capital.
The Bitcoin ETF approval has sparked a lot of interest in cryptocurrencies. An impact on stablecoin is a path that is less explored amid approval. There is still a possibility that crypto enthusiasts would end up facing the value of stablecoin along with its resistance to volatility to better diversify their portfolios.
Circle has remarked that the USDC has suffered greatly as a result of its vulnerability to variables such as rising interest rates, regulatory crackdowns, and bankruptcies. A catalog of partnerships compiled by Circle and an increase in the number of users have sustained USDC. Those searching for the U.S. dollar from around the world now have greater accessibility. The introduction of USDC-based products and services to the market is currently anticipated to yield benefits.
Having talked about the Bitcoin ETF, it is important to note that there has been a significant drop in the value of two dominating tokens: ETH and BTC. Both are exchanging hands at $2,521.97 and $42,715.86, respectively, at the time of drafting this article. ETH is somehow surviving the blow, but BTC is way below the mark of $45k, where it was dancing at the end of last week.