In a world where the cryptocurrency landscape is ever-shifting, Circle’s USDC is making headlines by defying expectations and increasing its market share at an impressive rate. Despite concerns surrounding new competition and potential dependency issues, the stablecoin’s performance is showcasing surprising resilience and growth.
Market Share Momentum
Circle’s stablecoin, USDC, has not just met but exceeded expectations in 2025, with its supply reaching a remarkable $72.5 billion. This figure runs 25% ahead of Wall Street broker Bernstein’s projections, which had pegged the stablecoin’s supply to hit $74 billion by the end of the year. Analysts, led by Gautam Chhugani, noted in a Tuesday report that USDC’s market share is currently “on a tear.” It’s not just the volume that’s noteworthy; USDC’s market share in relation to Tether’s USDT, the world’s largest stablecoin, has also crept up to 30% from 28% in the previous quarter.
Stablecoins like USDC play a crucial role in the crypto ecosystem by providing a reliable payment infrastructure and facilitating international money transfers. They’re pegged to stable assets such as the U.S. dollar, offering a semblance of stability in the highly volatile crypto market.
Hyperliquid’s Bold Move
Amidst USDC’s impressive performance, decentralized exchange Hyperliquid is stirring the pot with plans to launch its own stablecoin. This move is primarily aimed at reducing Hyperliquid’s dependency on USDC. Currently, a substantial $5.5 billion in USDC, which accounts for about 7.5% of its total supply, is being used as collateral on Hyperliquid. While the introduction of a new stablecoin could potentially introduce competition for Circle, the path is not without its hurdles. Bernstein’s analysts point out that creating adequate liquidity for a new stablecoin, especially in the derivatives market where execution reliability and sizing are paramount, is far from trivial.
The Impact of the GENIUS Act
The landscape for stablecoins is evolving, with new entrants expected as a result of the GENIUS Act. This legislative change is paving the way for new stablecoin issuers, potentially intensifying competition. Nevertheless, Bernstein’s report suggests that while new players will inevitably enter the market, the challenge of liquidity bootstrapping remains significant. For now, Circle’s entrenched position and growing market share provide a robust defensive moat against these emerging threats.
Navigating Economic Concerns
While some analysts have expressed concerns about Circle’s exposure to potential rate cuts, Bernstein’s report counters that these worries may be overstated. Lower interest income could impact revenues, but the expanding supply of USDC presents a broader positive picture for the stablecoin issuer. Rate cuts might even bolster a risk-on sentiment among digital assets, further driving demand for USDC and related yield strategies.
Circle’s Financial Fortitude
Circle remains a company to watch, with Bernstein rating its shares as outperforming and setting a price target of $230. At the time of writing, Circle’s stock was trading at a modest 1.2% higher, around $116. This performance, coupled with USDC’s burgeoning market share, underscores the company’s resilience in a competitive and rapidly evolving market.
Looking Ahead
As Circle navigates the challenges and opportunities of the current financial climate, it continues to adapt and grow in the face of competition and market shifts. The introduction of new stablecoins, like the one proposed by Hyperliquid, poses a potential challenge, yet Circle’s robust market presence and strategic initiatives could well keep it ahead of the curve.
Amidst all the buzz, Circle is not just resting on its laurels. The company recently unveiled its own Layer-1 blockchain, Arc, and reported a $428 million loss in Q2, indicating that it is willing to invest heavily in its future.
In conclusion, while the cryptocurrency market remains unpredictable, Circle’s USDC is proving to be a formidable force. Whether Hyperliquid’s new stablecoin will disrupt the status quo or merely add to the diversity of choices remains to be seen. But for now, Circle seems well-positioned to continue its upward trajectory in the stablecoin market.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
