USDC Market Capitalization Reaches 15-Month High

USDC has surged to a market capitalization of $34 billion, marking its highest level since March 2023. However, the stablecoin continues to lag behind USDT, which dominates the stablecoin market with an impressive $117 billion.

In 2024, USDC has shown a significant recovery, rising from a low of $24 billion in November 2023. This comes after the stablecoin faced sharp declines during the Terra collapse in mid-2022. USDC experienced further drops following the collapse of Silicon Valley Bank, where it briefly lost its peg and saw its market capitalization fall from $44 billion in March 2023 to $32 billion by April, according to CoinGecko.
Much of this decline was attributed to Operation Choke Point 2.0, a government initiative allegedly aimed at limiting crypto’s influence within the U.S. financial system. Crypto investor Nic Carter noted how this initiative forced investors to turn away from USDC, instead favoring its top competitor, USDT, whose market capitalization increased from $71 billion to $80 billion in the same period.

USDC Expands with New Use Cases

Amid USDC’s  recovery, it has expanded its utility and partnerships across the crypto industry. Some believe the Biden administration and its congressional allies may be easing their stance on the U.S. crypto sector, driving more investors back to USDC. Still, some experts caution that this outlook could be overly optimistic.

Beyond regulatory shifts, USDC’s parent company, Circle, has been actively increasing its presence through new integrations. In August, Arbitrum Orbit introduced USDC as a custom gas token, adding functionality to the $1.6 billion in USDC within the Arbitrum ecosystem. Additionally, Brazil’s largest neobank, Nubank, partnered with Circle in December 2023, enabling its 80 million users to access USDC.

Tether Maintains Market Dominance

Despite USDC’s growth, USDT continues to dominate the stablecoin market, holding 68% of the sector’s $170 billion total market capitalization. If future U.S. leadership takes a pro-crypto stance, USDC could gain further momentum and potentially challenge Tether’s lead in the stablecoin space.

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