USD
Circle’s Stablecoin Reclaims Lost Ground With a $56 Billion Milestone
Circle’s USD Coin (USDC) has staged a full recovery, reclaiming its pre-FTX collapse market capitalization with a record-breaking $56.2 billion in total supply. This milestone, reached in February 2025, underscores a dramatic rebound from its lowest point of $24.5 billion in early 2023, when a series of financial shocks, including the FTX implosion and the Silicon Valley Bank (SVB) crisis, sent the stablecoin’s supply tumbling. The past month alone has seen a staggering $10 billion surge in issuance, reflecting surging demand and renewed confidence in USDC.
Daily transactions have more than doubled in the past year, climbing from 23,450 in early 2024 to over 51,000 in early 2025. Institutional adoption has played a crucial role, with Ethereum network volumes surging from $2.3 billion to $4.5 billion per month. Polygon has experienced a similar uptick, reinforcing the stablecoin’s growing role in settlements and payments. Despite this, the biggest shift in USDC’s distribution has taken place on Solana, reshaping the stablecoin landscape.
Solana’s rapid expansion has fueled much of USDC’s recent growth, solidifying its position as a critical player in the stablecoin ecosystem. The blockchain’s low-cost, high-speed infrastructure has made it the preferred network for traders, particularly in the memecoin sector.
Over the past year, Solana’s share of USDC’s total supply has skyrocketed from under 3% to 17%, while Ethereum’s dominance has slid from 85% to 59%. In January 2025 alone, 45% of the $2.1 billion in USDC outflows from Ethereum migrated to Solana, further highlighting the shift in trader behavior.
The stablecoin supply on Solana has soared by 138% in just a month, reaching an all-time high of $12 billion. USDC now accounts for 80% of all stablecoins on the network, signaling a growing reliance on Solana as an alternative to Ethereum for stablecoin transactions. This shift not only highlights Solana’s increasing relevance but also underscores Ethereum’s waning grip on the stablecoin market.
USDC’s comeback has been bolstered by regulatory developments, particularly a new bill introduced in January 2025 that requires stablecoin issuers to secure official licenses as "permitted payment stablecoin issuers." Circle CEO Jeremy Allaire has praised the legislation as a key opportunity to solidify the U.S. dollar’s role in digital finance.
Adding to the momentum, former President Donald Trump’s executive order on January 24, 2025, explicitly supported dollar-backed digital assets, providing a tailwind for USDC’s resurgence. The order’s emphasis on stablecoin legitimacy and global competitiveness triggered a market rally, reinforcing investor confidence in regulated digital assets.
Despite its resurgence, USDC still trails behind its primary competitor, Tether (USDT), which commands a $140 billion market capitalization. However, USDC overtook USDT in daily transaction volume for the first time in January 2025, recording 51,000 transactions against USDT’s 38,200. The increasing preference for USDC in payments and settlements suggests a potential long-term challenge to Tether’s dominance, even as USDT maintains a larger overall supply.
USDC’s trajectory over the past two years has been defined by both collapse and recovery. The stablecoin endured severe market turbulence following FTX’s downfall in November 2022, when $6 billion in redemptions wiped out a significant portion of its supply within 72 hours. Binance’s decision to automatically convert users' USDC holdings to BUSD further eroded its exchange liquidity, cutting its supply by $3.7 billion.
The March 2023 SVB collapse added to the instability, temporarily causing USDC to depeg to $0.80 before Circle stabilized its reserves. By the end of 2023, the market cap had cratered to $24.5 billion, forcing Circle to launch an aggressive recovery strategy centered on institutional partnerships and regulatory alignment.
That strategy has now paid off. By January 2024, USDC had climbed back to $35.7 billion, and a year later, it has fully recovered to $56.2 billion. The resurgence not only marks a turning point for the stablecoin but also signals a broader transformation in the digital asset market. Solana’s dominance in stablecoin activity suggests that Ethereum’s once-unquestioned leadership is being eroded by lower-cost alternatives. While USDC’s adoption continues to accelerate, maintaining momentum will be crucial to challenging USDT’s supremacy in the long run.
This article has been refined and enhanced by ChatGPT.
