Author: Alex O’Donnell, CoinTelegraph; Translated by: Wu Zhu, Golden Finance
Data from Blockworks Research shows that 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 CoinGecko data, as of January 2, the circulating supply of USDC is close to $44 billion, nearly double the low of under $24 billion in 2023.
Meanwhile, as users migrate away from Ethereum, Blockworks data analyst Dan Smith stated in an article on January 2 on platform X that the distribution of holdings across blockchain networks has become more even.
This shift reflects increased on-chain activity and the rise of alternative Layer 1 networks such as Solana and Hyperliquid. Analysts expect this trend to continue, with USDC's market cap potentially doubling this year.
Diverse Networks
As of January 2, approximately 65% of USDC supply is on Ethereum, 10% on Solana, and about 15% spans Base and Arbitrum (both Layer 2s for Ethereum) as well as Hyperliquid (a Layer 1 for low-latency trading).
Smith noted that in 2023, USDC remains highly concentrated on Ethereum, with Ethereum holding 85% of the stablecoin's circulating supply.
Grayscale stated in a research report in December that this change is partly due to "retail traders increasingly entering the cryptocurrency market through Solana, as speculation around Solana-based meme coins and AI agent tokens intensifies."
According to DefiLlama data, the total value locked on Solana soared from about $1.5 billion in January to nearly $8.5 billion in December 2024.
USDC Supply Forecast
Donald Trump won the U.S. presidential election, and the market cap of stablecoins has increased significantly. Citibank stated in a research report in December that the total market cap of the top three stablecoins—Tether's USDt, USDC, and Dai—has grown by more than $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 depends on a key assumption: that the largest stablecoin, Tether, remains unregulated within the European Union." He added:
"If this happens, we expect European residents will 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) because "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. These include Ethena, Jupiter, and Jito.
