In brief USDC’s concentration on Ethereum is bullish for the network’s native asset, analysts said.
More than half of USDC’s circulating supply exists on Ethereum, while layer-2 networks and other scaling solutions support major amounts as well.
Circle’s $1.1 billion IPO on Thursday reflected Wall Street’s growing interest in stablecoins, but it may also strengthen institutions’ conviction toward Ethereum, analysts told Decrypt.
“Overall, it’s a super positive development for Ethereum and Coinbase,” he said, referring to the San Francisco-based exchange that has a revenue-sharing agreement for USDC with Circle.
Other Layer-1 networks, including Avalanche, Sui, and Aptos, each hold less than 2% of USDC’s circulating supply.
Just a moment.
Analysts stated that USDC’s focus on Ethereum is positive for the native asset of the network.
Ethereum is home to over half of the USDC in circulation, with significant amounts also supported by layer-2 networks and other scaling solutions.
As investors examine Circle’s business plan after the IPO, Etheruem’s name will unavoidably come up, according to one analyst.
Wall Street’s increasing interest in stablecoins was reflected in Circle’s $1.11 billion initial public offering (IPO) on Thursday, but analysts told Decrypt that it might also increase institutions’ faith in Ethereum.
Crypto data provider DefiLlama claims that even though Circle distributes its USDC stablecoin over 40 networks, Ethereum accounts for more than half of the stablecoin’s circulating supply, which is $36.7 billion.
Bitwise Senior Investment Strategist Juan Leon claims that the main reason USDC is focusing on Ethereum is because of the network’s popularity in decentralized finance, or DeFi. With Circle riding a fresh wave of momentum, he informed Decrypt that Ethereum should gain more than other networks if USDC’s footprint expands.
He remarked, “Overall, it’s a super positive development for Ethereum and Coinbase,” referring to the San Francisco-based exchange that shares USDC revenue with Circle.
The widespread use of USDC will continue to increase DeFi’s liquidity and encourage developers to create on Ethereum, he continued.
Yahoo Finance reports that Circle’s shares surged 165 percent to $83.22 on Thursday from an IPO price of $31. As of noon Eastern Time on Friday, the company’s stock price had risen to $114.50, a 38 percent increase from its closing price.
Assets supporting USDC, such as U, provide Circle with revenue. S. . Treasury securities. Ethereum was trading at about $2,500 just now, down 3% in the last day, according to cryptocurrency data source CoinGecko.
Compared to Ethereum’s rivals, $8 billion worth of USDC has been distributed on Solana, which amounts to about 13% of the total supply of stablecoins in circulation. Less than 2 percent of USDC is in circulation across other Layer-1 networks, such as Avalanche, Sui, and Aptos.
Circle has distributed approximately $10 billion in USDC across Ethereum’s mainnet, layer-2 networks like Arbitrum and Base, and Ethereum scaling solutions like Polygon. Hyperliquid, the Arbitrum-based network that supports the decentralized exchange, is also included.
Gerry O’Shea, head of global market insights at asset manager Hashdex, told Decrypt that Circle’s IPO is likely to spark interest in the company’s business model and that Ethereum will likely be mentioned as the technology driving emerging technology as investors begin to assess how stablecoins operate.
As investors seek to comprehend the infrastructure behind stablecoins, he believes this could help bring Ethereum and other smart contract platforms more attention. “IPOs generate a lot of interest. “.”.
In the U.S., Spot Ethereum ETFs made their debut. A. have become a measure of institutional interest in the second-largest cryptocurrency by market capitalization in the past year.
CoinGlass, a cryptocurrency data provider, reports that although the products have produced net inflows over the last eight trading days, Thursday’s inflows were comparatively muted at $11 million, in contrast to a recent peak of $110 million on Tuesday.
