The USD Coin (USDC) market cap is currently at a two-year low, with analysts saying it’s yet to fully recover after depegging earlier in the year.
Data from CoinGecko shows that USDC has a market value just north of $26 billion — its lowest level since July 2021, when it stood at $25.1 billion.
The stablecoin is still the sixth largest cryptocurrency by market capitalization, but it has fallen further away, in terms of dominance, from its biggest competitor, Tether (USDT), which is currently valued at $82.7 billion.
Only a year ago, USDC had a market cap of $56 billion as it consolidated its position as the second-biggest stablecoin. However, in March 2023, amid a regional banking crisis that caused the collapse of Silicon Valley Bank (SVB), USDC briefly lost its dollar peg following revelations that Circle had kept more than $3 billion of its reserves at SVB.
Some cryptocurrency market observers think that the decline in USDC may have also been a result of rising interest rates, which made holding USDC slightly more expensive than holding comparable financial instruments.
Wintermute CEO Evgeny Gaevoy also recently pointed out that the difference in USDC’s issuance model compared to USDT may have affected the USDC market cap.
The slump in the stablecoin’s market value comes even as its issuer, Circle, sold a minority stake to the Coinbase (COIN) crypto exchange.
As reported by crypto.news, Coinbase entered into a strategic agreement with Circle on Aug. 21 that would lead to the dissolution of Centre, a member-based consortium founded in 2019 that was responsible for the governance and issuance of USDC.
According to the partners, the decision to dissolve Center was informed by growing regulatory clarity around stablecoins in the U.S.
Following the agreement, Circle will now be fully responsible for issuing, supplying, and managing USDC. It also stipulates that the two companies will share equally profits made from USDC collateral held outside their respective platforms.
Furthermore, Circle disclosed that it would be integrating USDC onto six new blockchains in the next few weeks. The stablecoin already has a presence on Ethereum (ETH), Solana (SOL), Algorand (ALGO), and Avalanche (AVAX), among others.