The circulating supply of Circle’s United States dollar-backed stablecoin, USD Coin (USDC), has witnessed a significant increase of 80% from cyclical lows. According to data from Blockworks Research, the circulating supply is approaching $44 billion, nearly double the 2023 low of less than $24 billion.
Diversification Across Blockchain Networks
As onchain activity picks up and users migrate beyond Ethereum, holdings are becoming more evenly distributed among blockchain networks. This shift reflects increasing adoption and the rise of alternative layer-1 networks such as Solana and Hyperliquid.
Dan Smith, data analytics manager at Blockworks, stated in a January 2 post on X that:
"The distribution of USDC holdings is becoming more diversified across blockchain networks. This trend is driven by increasing onchain activity and the adoption of alternative layer-1 networks."
Onboarding New Users
The rise of Solana as an entry point for retail traders has contributed to this shift. As speculation intensifies around Solana-based memecoins and AI agent tokens, more users are entering the crypto market through Solana.
In 2023, USDC remained heavily concentrated on Ethereum, which held 85% of the stablecoin’s circulating supply. However, in 2024, the total value locked on Solana surged from around $1.5 billion in January to nearly $8.5 billion by December, according to data from DefiLlama.
Market Capitalization and Stablecoin Adoption
The combined market capitalizations of the top three stablecoins – Tether’s USDt (USDT), USDC, and Dai (DAI) – collectively grew by more than $25 billion after Donald Trump’s presidential election win in the United States. Cryptocurrency researcher Steno Research expects USDC’s circulating supply to more than double during 2025, reaching highs of around $100 billion.
Key Assumptions for Growth
This growth hinges on a critical assumption: that Tether, the largest stablecoin, remains unregulated within the European Union. If this scenario unfolds, we expect European residents to increasingly adopt USDC as an alternative to Tether’s USDT.
Accelerating stablecoin adoption is particularly bullish for decentralized finance (DeFi), as "stablecoins are the on-ramp to decentralized finance," according to Citi. In December, Grayscale added several DeFi applications, including two on Solana, to its list of the top 20 tokens to watch in the first quarter of 2025.
Market Outlook
The significant increase in USDC’s circulating supply and growing adoption of alternative layer-1 networks such as Solana are positive indicators for the market. As onchain activity continues to pick up and more users enter the crypto market, we can expect to see further growth in stablecoin adoption and DeFi applications.
Related Developments
- Grayscale adds AI launchpads, Solana DeFi apps to Q1 2025 top tokens
- How crypto laws are changing across the world in 2025
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