USDC Circulation Drops by 1.4 Billion in a Week, Market Trends Raise Concerns

USDC Circulation Drops Significantly

According to recent data, as of January 21, Circle issued approximately $4.8 billion in USDC while redeeming around $6.2 billion in the past week, resulting in a reduction of approximately $1.4 billion in circulating supply. This trend has raised market concerns about the usage of USDC.

Reserve Funds Remain Stable

Despite the decrease in circulation, the total reserves backing USDC remain steady at approximately $74.5 billion. Of this, $47.8 billion is held in overnight reverse repurchase agreements, $16 billion in short-term Treasuries with maturities under three months, $9.9 billion in systemically important institution deposits, and $800 million in other bank deposits.

Market Impact and Future Outlook

The decline in USDC circulation may reflect broader market shifts. Investors and institutions should closely monitor this trend to assess its implications for the stablecoin market.