The second-largest stablecoin, USD Coin (USDC), which was released by prominent financial company Circle, has had a decline in market capitalization for 13 months running. In the meantime, USDC’s major rivals are stealing its market share in the stablecoin space.
USDC cap is half of what it was year ago: De-pegging aftermath?
The second-largest stablecoin, USD Coin (USDC), had a decline in its total market value today, August 3, 2023, to $26.1 billion in equivalent. When it peaked in late June 2022, USDC’s market capitalization was around $56 billion.
In July 2021, USDC’s market capitalisation was at its lowest point previously. It’s important to see that USDC returned to new highs while only losing 10% of its value during the first quarter of 2022 crisis.
With $83 billion worth of stablecoins in circulation, U.S. Dollar Tether (USDT), the largest stablecoin and USDC’s major rival, set a new milestone for stablecoin market capitalization by growing by 25.7%.
Following the agonising de-pegging on March 11, 2023, USDC’s market value drop quickened. As previously reported by U.Today, investors in USDC began dumping their holdings in a panic due to reports that the banks holding Circle’s resources were bankrupt.
The market capitalization of USDC dropped by $11 billion in March 2023, possibly the quickest decline in the stablecoin’s history.
Market capitalization shrinking despite major tech milestones
By market capitalization, USD Coin (USDC) dropped out of the top 5 cryptocurrencies within the specified time frame. A coin known as XRP took its place; this was prompted by news of Ripple’s court wins against the SEC.
In terms of technical advancement, Q3, 2023, was crucial for USDC at the same time. It first released natively on the popular Ethereum L2 scaler, Arbitrum (ARB). It opened up USDC to a wide range of dApps built on Arbitrum and made transactions with it more affordable and swift.
Additionally, Coinbase Wallet has incorporated the biggest EVM blockchain, Polygon (MATIC), with zero-gas USDC transactions. EIP 4337, or the so-called “Account Abstraction” feature of blockchains similar to Ethereum, made this choice available.
