USDC stablecoin is making a comeback

The total market capitalization of Circle's USDC has risen faster than that of rival Tether's USDT in recent months, according to the report.

Circle USDC, the second-largest stablecoin by market capitalization, is making a comeback, with increased liquidity around the world and rapidly growing usage outside the US, leading to strong increase in supply in recent months, Coinbase (COIN) said in a research report on Monday.

"USDC supply has increased by 14.3% or more than $3.5 billion since December 1, 2023, bringing its total market capitalization to $28 billion compared to a lower growth of 8.7 % for USDT over the same period," wrote analysts David Duong and Li Liu. . USDT is Tether's rival dollar-based stablecoin and is by far the largest, with a market capitalization of $98 billion.

The increase in USDC liquidity reflects the "general rebound in retail and institutional demand as cryptocurrencies have entered a new phase of their market cycle following the launch of spot bitcoin ETFs in the US," which contributes to new capital inflows," the authors wrote.

USDC is also building a larger presence in markets outside the US, according to the report, noting that the stablecoin has quintupled its share of spot and derivatives activity, albeit to just 4% of the total. of centralized exchange (CEX) volumes globally.

In addition to the spot ETF catalyst, liquidity growth was boosted by the launch of international exchange Coinbase and the re-listing of USDC pairs on rival exchange Binance late last year, the report added.

USDC is issued by Circle, which in turn is backed by Coinbase.

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