USDC Surpasses USDT in On-Chain Activity and Market Cap Amid MiCA-Driven Shift
JPMorgan analysts report Circle’s USDC stablecoin has outpaced Tether’s USDT in on-chain activity and market cap growth. USDC’s market cap rose 72% year-to-date to $74 billion, compared with USDT’s 32% gain. The shift is driven by clearer regulatory frameworks—particularly Europe’s MiCA—and increased institutional adoption. USDC’s transparent reserve management, regular audits and integration with Solana, Base and cross-chain protocols have boosted on-chain velocity and utility for payments and settlements. In contrast, USDT lost MiCA authorization and faced delistings on European exchanges. With MiCA effective July 2024, regulatory divergence is set to intensify competition among stablecoins. Traders should monitor USDC inflows as a barometer of institutional confidence and liquidity trends.
Bullish
In the short term, the surge in USDC’s on-chain activity and market cap signals heightened demand and deeper liquidity, typically underpinning stablecoin usage in trading and settlement. Regulatory clarity under MiCA and institutional endorsements reduce counterparty risk, encouraging funds to flow into USDC for enterprise and DeFi applications. Over the long term, sustained audit transparency, cross-chain integrations and payment partnerships could solidify USDC’s position as the go-to regulated stablecoin, potentially marginalizing USDT in EU and institutional markets. While stablecoins trade at par, improved trust and network effects may widen USDC’s utility and backing, supporting its peg stability and transactional velocity, which is bullish for overall market confidence and usage.