The circulating supply of Circle’s United States dollar-backed stablecoin, USD Coin (USDC), has risen 80% from cyclical lows as onchain activity picks up, according to data from Blockworks Research.
As of Jan. 2, USDC’s circulating supply is approaching $44 billion, nearly double the 2023 low of less than $24 billion, according to CoinGecko.
Meanwhile, holdings are more evenly distributed among blockchain networks as users migrate beyond Ethereum, Blockworks data analytics manager Dan Smith said in a Jan. 2 post on the X platform.
The shift reflects increasing onchain activity and the rise of alternative layer-1 networks such as Solana and Hyperliquid. Analysts expect the trend to continue, with USDC’s market capitalization potentially doubling this year.
Source: Dan Smith
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Diversifying networks
As of Jan. 2, approximately 65% of USDC supplies are on Ethereum, 10% are on Solana, and roughly 15% span Base and Arbitrum — both Ethereum layer 2s — as well as Hyperliquid, a layer 1 for low-latency trading.
In 2023, USDC remained heavily concentrated on Ethereum, which held 85% of the stablecoin’s circulating supply, Smith said.
This change is partly because “retail traders increasingly enter the crypto market through Solana [as] speculation intensifies around Solana-based memecoins and AI agent tokens,” Grayscale said in a December research note.
In 2024, the total value locked on Solana surged from around $1.5 billion in January to nearly $8.5 billion by December, according to data from DefiLlama.
Source: CoinGecko
Onboarding users
Stablecoin market capitalizations increased sharply after Donald Trump’s presidential election win 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, Citi said in a December research note.
Cryptocurrency researcher Steno Research expects USDC’s circulating supply to more than double during 2025, reaching highs of around $100 billion.
“This growth hinges on a critical assumption: that Tether, the largest stablecoin, remains unregulated within the European Union,” Steno said, adding:
“If this scenario unfolds, we expect European residents to increasingly adopt USDC as an alternative to Tether’s USDT.”
Accelerating stablecoin adoption is particularly bullish for decentralized finance (DeFi), as “stablecoins are the on-ramp to decentralized finance,” Citi said.
In December, Grayscale added several DeFi applications, including two on Solana, to its list of the top 20 tokens to watch in the first quarter of 2025. They include Ethena, Jupiter and Jito.
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