USDC market cap rises 80% to $44B amid increased activity

The circulating supply of USDC (CRYPTO:USDC), Circle's USD-backed stablecoin, has increased by 80% since its 2023 low, reaching a market cap of nearly $44 billion, according to Blockworks Research.  

The data from January 2 shows that USDC has seen significant growth in onchain activity and wider distribution across various blockchain networks.  

Previously, USDC's circulating supply was heavily concentrated on Ethereum (CRYPTO:ETH), where it accounted for 85% of the total.  

As of early 2024, however, about 65% of USDC’s supply is still on Ethereum, but there is a noticeable shift toward other platforms.  

Approximately 10% of USDC is now located on Solana, while about 15% is distributed across Ethereum Layer-2 solutions such as Base and Arbitrum (CRYPTO:ARB), as well as Hyperliquid (CRYPTO:HYPE), a low-latency trading platform.  

This shift is driven by growing onchain activity and a rising interest in alternative layer-1 networks like Solana.  

Grayscale analysts noted that retail traders have increasingly gravitated toward Solana, driven by speculation surrounding Solana-based (CRYPTO:SOL) memecoins and AI agent tokens.  

As the market shifts, analysts predict that USDC’s market capitalisation could potentially double during 2025, possibly reaching up to $100 billion.  

Citi's report mentions that the increase in stablecoin market caps, particularly USDC, follows Tether's (CRYPTO:USDT) ongoing unregulated status in the European Union.  

This situation may lead to more European users adopting USDC as an alternative to Tether's USDT.  

The growth of USDC is particularly beneficial for decentralised finance (DeFi), as stablecoins remain a crucial entry point for users into DeFi platforms.  

As decentralised finance continues to expand, platforms like Solana-based Ethena (CRYPTO:ENA), Jupiter (CRYPTO:JUP), and Jito (CRYPTO:ETH) are expected to play a larger role in the DeFi ecosystem in 2025.  

At the time of reporting, the USDC price was $1.