Circle takes steps to shore up USDC amid plummeting market share

  • Circle has launched USDC on Optimism and Base.
  • While USDC exceeded USDT in terms of overall transaction volume, the latter enjoyed more daily usage.

Stablecoin issuer Circle announced the launch of its USD Coin (USDC) on leading Layer 2 (L2) networks Optimism [OP] and Base on 5 September.

The launch of USDC on these networks forms part of Circle’s plan to expand the availability of USDC to more blockchains. Later this month, it plans to make the stablecoin coin native to the Cosmos network via Noble, an app chain purpose-built for native asset issuance on the chain. 

USDC suffered a blow to its market share in March following the unexpected collapse of Silicon Valley Bank (SVB). On 11 March, Circle confirmed its inability to remove $3.3 billion of the $40 billion USDC reserves locked up at SVB. This immediately caused the stablecoin to lose its $1 peg and traded for as low as $0.96 on 12 March before finally regaining its peg on 16 March.

At $26.04 billion at press time, USDC’s market capitalization has since dipped by 33%, per data from CoinMarketCap.

USDC 1678575600 1694041199 graph coinmarketcap

Source: CoinMarketCap

USDC excels in terms of transaction volume

According to data tracked by on-chain analytics firm IntoTheBlock, despite the steady decline in its market capitalization, USDC outpaces Tether’s USDT in terms of overall transaction volume. 

USDC is more actively traded than USDT, with a daily transaction volume of over $5.7 billion compared to USDT’s $4.5 billion.

Data from Dune Analytics lends credence to this position, as USDC has led the overall stablecoin market regarding transfer volume in the last month. With a transfer volume of $445 billion in the last 30 days, 48% of stablecoins moved during that period was USDC. USDT trails behind with a transfer volume share of less than 40%.

Screenshot 2023 09 06 at 06.53.23

Source: Dune Analytics

However, in terms of scale and adoption, USDT notably exceeds USDC. According to data from IntoTheBlock, as of 4 September, the total count of wallet addresses holding USDC was 1.73 million. On the same day, USDT boasted of 4.13 million wallet addresses. This meant that USDT had nearly four times the active user base of USDC.

While USDC leads in terms of overall transaction volume, USDT continues to record higher daily transaction counts. According to the latest data available from IntoTheBlock, on 4 September, 97,000 transactions involving USDT were completed.

On the same day, USDC only saw 34,000 transactions. Trailing downward since 6 March, USDC’s daily transactions count has since plummeted by 61%. 

ITB usdc number of transactions ethereum 2023 09 06T05 54 09.924Z

Source: IntoTheBlock

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