- USDC’s supply has risen since the year began.
- The daily number of transfers involving the stablecoin has grown as well.
For the first time since the Silicon Valley Bank (SVB) crisis last year, the circulating supply of leading stablecoin USD Coin (USDC) has seen a net increase, signaling renewed confidence in the crypto asset, according to data from Glassnode.
Following a significant decline in the coin’s supply and market supply in 2023, its supply has climbed by $1.23 billion since the start of 2024. At press time, the stablecoin’s circulating supply was 25.86 billion USDC, rising by 6% in the last 25 days, per data from Glassnode.
Turbulent 2023 for USDC
Following the unexpected collapse of SVB, USDC suffered a huge blow to its marketshare. On the 11th of March 2023, the stablecoin’s issuer, Circle, confirmed its inability to remove $3.3 billion of the $40 billion of USDC reserves locked up at SVB.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
This immediately caused the stablecoin to lose its $1 peg and traded for as low as $0.96 on 12th March before finally regaining its peg on 16th March.
Amid all this, many swapped their USDC for other stablecoins, predominantly USDT. This persisted till the end of the year despite attempts by Circle to forestall the decline in supply by issuing the native version of the coin on the Polkadot [DOT], Base, Optimism [OP], and Near [NEAR] blockchains.
According to data from Glassnode, between 11th March and 31st December 2023, USDC’s circulating supply fell by 44%.
Source: Glassnode
As the stablecoin’s supply and market share plummeted, its amount held on exchanges plunged as well. By the 31 of December, it had fallen to 2 billion USDC, declining by 71% since 11th March.
However, the steady growth in USDC’s supply has led to an uptick in its presence on exchanges. Data from Glassnode showed that it has risen by 5% since the year began. At press time, 2.11 billion USDC sat on crypto exchanges.
Further, the bull market run that began in October has brought about a rally in the number of transfers involving USDC, after months of decline post-SVB collapse. The stablecoin’s count of daily transfers assessed on a 30-day moving average has since grown by 70%.
Source: Glassnode
When a stablecoin witnesses a hike in its number of daily transfers, it suggests heightened trading activity or investment involving the coin.