- Binance’s relisting fuels a significant surge in USDC market share.
- USDC gains momentum with increased adoption on the Solana blockchain.
- Cryptocurrency market recovery and DeFi resurgence contribute to USDC’s remarkable rally.
In a surprising turn of events, the crypto market is witnessing a remarkable resurgence of USD Coin (USDC), the second-largest stablecoin by market capitalization. According to recent data from Kaiko, USDC’s volume market share on centralized exchanges (CEX) has more than doubled since January 2022.
This resurgence is particularly noteworthy when considering the subdued activity of USDC during the first half of 2023, amidst the prolonged bear market in the crypto space. The turnaround also follows significant changes on Binance, the world’s largest cryptocurrency exchange, which had previously delisted USDC in an effort to concentrate liquidity and boost the market share of BUSD, the native stablecoin of Binance.
Jeremy Allaire, CEO of Circle, the firm behind USDC, had previously commented that Binance’s decision to delist USDC would be bullish for the stablecoin. Allaire suggested that the move would likely result in more USDC flowing to Binance, a prediction that has seemingly come to fruition.
Fast forward less than a year to late 2023, and Binance has reinstated USDC on its platform. The subsequent relisting, combined with Binance’s massive user base and liquidity, has played a pivotal role in significantly boosting USDC’s market share on centralized exchanges in recent trading months.
Examining Kaiko’s data, USDC’s trading activity, measured by volume, gained momentum from late Q3 2023. This coincided with a broader market recovery, with major cryptocurrencies such as Bitcoin, Ethereum, and Solana experiencing an upward trajectory. The surge in USDC and stablecoin activity also aligns with the recovery of decentralized finance (DeFi) activities, with DeFiLlama data indicating a trading volume exceeding $56 billion.
While Binance’s relisting has been a crucial factor, another driving force behind USDC’s growth is its increasing adoption on Solana, a high-performance blockchain network. Recent data from Artemis revealed that the transaction volume of Solana-based USDC has surpassed that of USDT on Tron, marking a significant shift in the stablecoin landscape.
This shift gains additional significance when considering that Tron, known for its low fees and high throughput, primarily facilitates stablecoin transactions. Despite USDT’s dominance in the Tron ecosystem, USDC has managed to outpace it in terms of transaction volume, with an impressive 11X increase in the past three months alone. Additionally, there has been a noticeable uptick in USDC trading on Ethereum.
In summary, USDC’s resurgence in 2024 is attributed to multiple factors, including its reinstatement on Binance, increased adoption on Solana, and a broader market recovery. The stablecoin’s ability to outpace its counterparts in specific blockchain ecosystems signals a dynamic shift in the stablecoin landscape, setting the stage for an intriguing year ahead in the crypto space.
Disclaimer: Please note that the viewpoints and perspectives expressed by the author, as well as any individuals referenced in this article, are intended solely for informational purposes. They should not be construed as financial or investment advice. It’s important to acknowledge that investing in or trading cryptoassets carries inherent financial risks.