Author: Alex O’Donnell, CoinTelegraph; Translated by: Wu Zhu, Golden Finance
According to data from Blockworks Research, as on-chain activity rebounds, the circulating supply of Circle's dollar-backed stablecoin USD Coin has risen by 80% from its cyclical low.
According to data from CoinGecko, as of January 2, the circulating supply of USDC is close to $44 billion, nearly double its low of under $24 billion in 2023.
Meanwhile, as users migrate away from Ethereum, Blockworks data analytics manager Dan Smith indicated in a post on the X platform on January 2 that the distribution of holdings across blockchain networks is becoming more even.
This shift reflects the increase in on-chain activity and the rise of alternative Layer 1 networks such as Solana and Hyperliquid. Analysts expect this trend to continue, and the market capitalization of USDC could double this year.
Diverse Networks
As of January 2, approximately 65% of the USDC supply is on Ethereum, 10% on Solana, and about 15% spans Base and Arbitrum (both Layer 2 for Ethereum) and Hyperliquid (a Layer 1 for low-latency trading).
Smith indicated that in 2023, USDC remains highly concentrated on Ethereum, with Ethereum holding 85% of the circulating supply of stablecoins.
Grayscale stated in a research report in December that this change is partly due to 'retail traders increasingly entering the cryptocurrency market via Solana, as speculation around Solana-based meme coins and AI agent tokens intensifies.'
According to data from DefiLlama, the total value locked on Solana surged from approximately $1.5 billion in January to nearly $8.5 billion in December 2024.
USDC Supply Forecast
After Donald Trump won the U.S. presidential election, the market value of stablecoins increased significantly. Citibank stated in a research report in December that the total market capitalization of the top three stablecoins—Tether's USDt, USDC, and Dai—grew by over $25 billion.
Cryptocurrency research firm Steno Research expects that by 2025, the circulating supply of USDC will more than double, reaching a high of approximately $100 billion.
Steno stated: 'This growth relies on a key assumption: that the largest stablecoin Tether remains unregulated within the EU.' He added:
'If this happens, we expect European residents to increasingly adopt USDC as a replacement for Tether's USDT.'
Citibank stated that the accelerated adoption of stablecoins is particularly beneficial for decentralized finance (DeFi) as 'stablecoins are the gateway to decentralized finance.'
In December, Grayscale added several DeFi applications (including two applications on Solana) to its list of 20 tokens to watch in the first quarter of 2025. They include Ethena, Jupiter, and Jito.
