The circulating supply of Circle’s US dollar-backed stablecoin USDC (USDC) has surged 80% from cyclical lows as onchain activity surges, according to data from Blockworks Research.
As of Jan. 2, USDC's circulating supply was approaching $44 billion, nearly double its 2023 low of less than $24 billion, according to CoinGecko.
Meanwhile, holdings are being distributed more evenly across blockchain networks as users migrate away from Ethereum, Blockworks data analytics manager Dan Smith said in a Jan. 2 blog post on the X platform.
The move reflects increased 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 cap potentially doubling this year.
As of January 2, approximately 65% of USDC offerings are on Ethereum, 10% are on Solana, and about 15% comprise Base and Arbitrum — both layer-2 Ethereum exchanges — as well as Hyperliquid, a layer-1 for low-latency trading.
In 2023, USDC remained heavily concentrated in Ethereum, which held 85% of the stablecoin's circulating supply, Smith said.
This shift is partly due to the fact that “retail traders are increasingly entering the crypto market through Solana [as] speculation intensifies around memecoins and Solana-based AI agent tokens,” Grayscale said in a December research note.
In 2024, the total value locked (TVL) in Solana has skyrocketed from around $1.5 billion in January to nearly $8.5 billion in December, according to data from DefiLlama.
Stablecoin market caps have surged sharply following Donald Trump’s election victory. The combined market caps of the three major stablecoins — Tether (USDT), USDC and Dai (DAI) — have collectively grown 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 peaks of around $100 billion.
“This growth depends on one critical assumption: that Tether, the largest stablecoin, remains unregulated within the European Union,” Steno said, adding:
“If this scenario plays out, we expect European residents to increasingly adopt USDC as an alternative to Tether’s USDT.”
The acceleration of stablecoin adoption is particularly bullish for decentralized finance (DeFi), as "stablecoins are the gateway to decentralized finance," Citi said.
In December, Grayscale added several DeFi applications, including two on Solana, to its list of top 20 tokens to watch in Q1 2025. They include Ethena, Jupiter, and Jito.