The total market cap of USDC currently in circulation has made a record significant increase since the beginning of 2021.
Data from market monitor Skew has shown that the market capitalization for USDC has significantly risen by 100%. Results also reflected a steady ascent since the beginning of August 2020.
However, this steady growth accelerated at the beginning of 2021. This new momentum saw the market cap of USDC rise from over $3 billion to about $6 billion in January alone. However, there may be some inconsistency in the data. According to CoinGecko, USDC’s market cap already stood at around $4 billion on Jan 1.
USDC Shows Strong Growth
Stablecoins like USDC and DAI have lately been positioning themselves with a growing market share. BUSD and MKR have also seen sginificant growth, each holding a market cap of $1.5 billion, This leaves the smaller stablecoins like GUSD, HUSD, TUSD, and PAX to compete for the remaining share.
Data from CryptoQuant reinforces this narrative and shows that stablecoin holdings on exchanges are making simultaneous increases. It’s often inferred that a spike in the inflow of stablecoins like USDC will cause an uptick in the price of Bitcoin and other major cryptocurrencies.
Although USDC has proved a formidable competitor, it has fallen behind USDT and BUSD. While Tether maintains its dominance over the space, it has continued to lose some market share.
USDT currently commands 42% of the market share while BUSD, USDC, and HUSD have scooped up 24%, 21%, and 9.1% respectively.
Although Tether has seen substantial growth, some traders have expressed fears of USDT being created to manipulate prices of major cryptocurrencies like Bitcoin. This leads to worries that regulatory actions like a ban of USDT would be detrimental to the price of Bitcoin.
MicroStrategy CEO Michael Saylor believes that these concerns are baseless. Saylor notes that retail investors largely contribute to the use of these stablecoins in their trading. Also, given that these uncertainties are due to regulations, others like USDC could take their place as they are more regulatory compliant