Growth in USDC Wallet Holdings Soars by 59% in 2023 Amid Market Disruptions
Summary:
In 2023, wallet holdings of USD Coin (USDC) grew by 59%, despite a $20 billion cut in the overall circulating supply. Issuer Circle highlighted reasons such as rising interest rates and regulatory crackdowns caused investors to redirect their capital to conventional markets. Still, there was strengthened acceptance of USDC, with over 2.7 million wallets holding the coin by the end of the year. In 2024, Circle has filed for an initial public offering and partnered with Yellow Card to grow USDC usage in Africa.
In 2023, the quantity of wallets containing a minimum of $10 worth of USD Coin (USDC) expanded by an impressive 59%, based on a report released by Circle, its issuer, on January 15. This growth evolution occurred even as USDC experienced a $20 billion reduction in overall circulating supply, suggesting an increase in user base as the coin's market valuation fell. In a study named “State of the USDC Economy,” a comprehensive analysis of USDC's present usage was displayed. Circle noted that from the start of the year until November, the coin's supply circulation plummeted from $45 billion to $25 billion, indicating a nearly 44% drop. This significant downturn was attributed to increasing interest rates, regulatory crackdowns, bankruptcies, and outright scams in the crypto market. These factors led investors to transfer their capital from the crypto realm to conventional markets. The opportunity costs associated with holding USDC during this time of escalating interest rates lured investors toward conventional markets. Despite these setbacks, the report indicated consistent signs of USDC's wider acceptance. Throughout the year, over $197 billion in USDC was minted or burned, positioning the coin as the premier conduit between digital assets and mainstream finance. Furthermore, the count of wallets carrying more than $10 of USDC surged to upwards of 2.7 million, marking a 59% growth from the previous year. USDC faced a rocky journey in 2023, momentarily losing its peg amidst a short yet severe banking crisis in the U.S. However, a swift recovery was seen after the Federal Reserve stepped in to refund depositors from multiple unsuccessful banks. As 2024 kicked off, Circle made moves to apply for an initial public offering to accumulate funds for bolstering the USDC ecosystem. Simultaneously, a partnership with Yellow Card was formed to foster the coin's use in Africa.
Published At
1/15/2024 10:42:01 PM
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