The circulating supply of Circle’s United States dollar-backed stablecoin, USD Coin (USDC), has witnessed a significant increase of 80% from cyclical lows as on-chain activity picks up, according to data from Blockworks Research.
As of January 2nd, USDC’s circulating supply is approaching $44 billion, nearly double the 2023 low of less than $24 billion, according to CoinGecko. This upward trend reflects growing adoption and usage of stablecoins in the cryptocurrency market.
Diversification of Networks
The distribution of USDC holdings among various blockchain networks has also undergone a significant shift. As of January 2nd, approximately 65% of USDC supplies are on Ethereum, while around 10% are on Solana and roughly 15% span across Base and Arbitrum (both Ethereum layer 2s) as well as Hyperliquid, a layer 1 for low-latency trading.
In contrast, in 2023, USDC remained heavily concentrated on Ethereum, which held an impressive 85% of the stablecoin’s circulating supply. This change is attributed to several factors, including:
- The increasing popularity of Solana-based projects and tokens
- Growing adoption of alternative layer-1 networks like Solana and Hyperliquid
Onboarding New Users
The total value locked on Solana surged from around $1.5 billion in January 2024 to nearly $8.5 billion by December, according to data from DefiLlama.
Stablecoin market capitalizations have seen a significant increase since the presidential election win of Donald Trump in the United States. The combined market capitalizations of the top three stablecoins – Tether’s USDt (USDT), USDC, and Dai (DAI) – collectively grew by more than $25 billion, as noted in a research report by Citi.
Cryptocurrency researcher Steno Research predicts that USDC’s circulating supply will more than double during 2025, reaching highs of around $100 billion. This growth is contingent on the assumption that Tether, the largest stablecoin, remains unregulated within the European Union.
Accelerating Stablecoin Adoption
Accelerating stablecoin adoption has significant implications for decentralized finance (DeFi). As noted by Citi, "stablecoins are the on-ramp to decentralized finance." This highlights the critical role stablecoins play in enabling users to access and participate in DeFi applications.
In December, Grayscale added several DeFi applications, including two on Solana, to its list of top 20 tokens to watch in the first quarter of 2025. These include Ethena, Jupiter, and Jito.
Conclusion
The rise in USDC’s circulating supply by 80% reflects growing adoption and usage of stablecoins in the cryptocurrency market. As users increasingly seek alternative layer-1 networks like Solana and Hyperliquid, we can expect this trend to continue. With predictions suggesting that USDC’s market capitalization could potentially double this year, it is essential for investors and traders to remain informed about the latest developments in the stablecoin space.
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