USDC stablecoin (USDC) rate
Early USDC period (2018 - 2020)
Since its introduction in October 2018, the USDC stablecoin issued by Circle has displayed considerable volatility, which lasted until October 2020. This was primarily due to the asset's small capitalization and low liquidity.
Until July 2020, the USDC capitalization did not exceed $1 billion, and the daily trading volume was less than $300 million. It is worth noting that even now, with the crypto market capitalization of almost $2 trillion, not all significant altcoins from the top 20 leading cryptocurrencies have such large trading volumes. With this in mind, it is unsurprising that the USDC stablecoin was quite volatile for a long time until its capitalization and liquidity increased.
Almost a week after listing, the USDC rate on exchanges rose to nearly $1.03. However, it is worth considering the percentage of deviation from the USDC rate and capitalization. At that time, the capitalization of USDC stablecoin was only about $24, and this percentage of deviation was relatively small. With USDC's current capitalization of nearly $35 billion, even a 0.1% deviation would be more critical.
In January 2020, the USDC stablecoin price decreased to $1.04. At the same time, the token rate deviated below $1 but did not fall below $0.99, not counting some crypto exchanges, where the price could collapse due to high trading volumes and low liquidity.
After that, the rate remained stable almost all the time, but cases of de-pegging (decoupling from the U.S. dollar exchange rate) still occasionally occurred, but only on specific sites.
New phases of the crypto market (2021 - 2024)
In 2021, the capitalization of USDC stablecoin began to grow rapidly: if at the beginning of 2021, this figure was $4 billion, then in June, it reached a historic high of $55 billion, that is, in just six months, it has grown more than 14 times.
The most notable case for the USDC exchange rate was the collapse of Silicon Valley Bank, due to which the USDC stablecoin exchange rate collapsed to $0.88 in a moment and recovered for several days. During that period, investors actively transferred funds into USDT, the rate of which remained stable. It is worth noting that since the collapse of Silicon Valley Bank, the capitalization of USDC stablecoin began to decline: since March 2023, in just a year and a half, this indicator has decreased by about a quarter — from $43.8 to $34.9 billion.
At the same time, competitors such as Tether (USDT), Dai (DAI), First Digital USD (FDUSD), and several others have only strengthened their positions. Despite this, USDC remains the second most capitalized stablecoin after USDT, beating all others by a wide margin.
USDC's capitalization declined until November 2023, when it reached a two-year low of $24 billion, but the figure has grown almost 1.5 times since then. On a positive note, USDC Circle, the issuer of the USDC Circle stablecoin, received an Electronic Money Institution (EMI) license in July 2024, which gives the company the right to provide services with its tokens to EU residents based on the Markets in Crypto-Assets (MiCA) law that came into effect. It is worth noting that this license, at least as of September 2024, does not even exist for the issuer of the leading stablecoin Tether.
In addition, Circle continues to develop partnerships with large firms, including in the European Union. For example, in August 2024, Circle's CEO announced that Apple would soon include NFC payments with USDC stablecoin in its iPhone smartphones.
