According to Cointelegraph, the stablecoin market capitalization has reached an unprecedented level, driven by consistent growth since mid-2023. Data from Alphractal indicates that the market cap surged by 73%, climbing from $121.18 billion in August 2023 to a record $211 billion. Notably, USDC has been gaining a competitive edge over other stablecoins during this period.
The analysis of other stablecoins, excluding Tether’s USDT and USDC, shows relatively modest growth since 2024, underscoring the dominance of USDT and USDC in the crypto market. USDT, the largest stablecoin by market cap, achieved an all-time high of $140 billion in December 2023, with its market cap slightly decreasing to $139.4 billion by January 31, 2025, maintaining a market dominance of 63.84%.
USDC has experienced significant momentum since November 2023. CoinMarketCap data reveals that USDC’s market capitalization has more than doubled, increasing by over 120% from a low of $24.1 billion on November 14, 2023, to $53.4 billion at present. This growth corresponds with a surge in demand, as USDC pairs recorded a peak daily trading volume of $20 billion on January 18, 2025. Consequently, USDC’s market share by capitalization has risen to 24.6% as of January 31, 2025.
Cointelegraph previously reported a 78% year-over-year growth in USDC circulation, surpassing the growth rate of all global stablecoins. As of January 31, 2025, USDC’s circulating supply stands at $53.4 billion, more than double its 2023 low. Alphractal attributes USDC’s growth to investors converting a significant portion of their crypto holdings into USDC following a decline in altcoins.
The USDC market surge in 2024 followed a substantial drop in 2023, when its market value decreased by 45% after the collapse of Silicon Valley Bank. USDC’s current dominance mirrors levels seen at the end of the 2021 bull cycle, which preceded the 2022 bear market that saw Bitcoin’s price fall to $15,500 in November 2022.
Alphractal suggests that if USDC’s dominance continues to rise, it could signal increased risk aversion in the crypto market, potentially indicating a bearish trend. Conversely, a decline in dominance might pave the way for new market highs. Historically, during the last bull market cycle, USDC supply began rising in May and peaked in March 2022, four months after asset prices peaked. If the stablecoin market supply continues to grow while crypto prices decline, the market may reach its peak in the coming months. However, a rising stablecoin market cap is often associated with growing investor confidence, suggesting the potential for continued bullish momentum.
Catherine
