5 Insights That Shape My View on USDC
Most investors still view stablecoins as just another crypto bet. But that framing misses what is happening. Stablecoins are on track to become one of the largest holders of U.S. Treasuries by 2030, and they’re increasingly integrating themselves into institutional financial infrastructure.
They are addressing a global money supply of roughly $60 trillion. That’s not a niche market—it’s a massive runway for growth. In this piece, I break down five key insights that shape my view on USDC and the broader stablecoin market.
TL;DR
Stablecoins are evolving from a crypto tool into a global settlement layer.
USDC is building an institutional moat
With a ~$60T addressable market, this is a long-term compounding opportunity, not a short-term trade.
1. Stablecoins matter
Firs off, what is a stablecoin? A stablecoin is a dollar that is converted to a digital token. The token can be swapped for a real dollar at any time. The actual dollar that is deposited gets invested in US treasuries by the stablecoin company. The stablecoin company derives revenue from those dollars. This is the main revenue stream of Circle Internet Group, the company behind the stablecoin USDC.
The token is then deposited on the blockchain. For example, USDC makes uses of various blockchains, the biggest being Ethereum and Solana. What is absolutely imperitive to understand, is that the stablecoin company does not control the blockchain. The blockchain is a decentralized record keeping system.
Why do we need them?
The key reason stablecoins provide value comes down to how money moves today.
Moving money still relies on multiple intermediaries, typically banks and custodians. In international wire transfers, for example, one bank sends a message to another that funds are on their way. One account is credited, another debited. Often, several banks are involved, because the sending bank may not have a direct connection with the receiving bank.
You are effectively dealing with each bank’s individual database. The longer the distance, the more steps are required—and these databases do not communicate directly with each other.
These layers cause delays, which can be costly. In global trade, for instance, if funds were received instantly, goods could be released sooner.
Such delays also explain why companies often turn to short-term financing; their funds are temporarily locked within the banking system.
Stablecoins remove these frictions by operating on a single system: the blockchain. This acts as a global settlement layer, where both sides of a transaction exist on the same database rather than separate ones.
In financial markets, processing on a single system (blockchain) creates advantages as well. When you buy a bond or stock, the “asset database” and the “cash database” are typically owned by different companies. This creates uncertainty, as it takes time to verify whether the other party can fulfill its obligations.
Clearing houses basically exist to solve this problem: if one party is unable to meet its obligations, the clearing house guarantees either payment or delivery of the asset.
With stablecoins, however, settlement is instant and both parties operate on a shared database. This reduces the need for clearing houses, potentially saving billions in clearing costs.
This is why institutions like BlackRock argue that financial markets should move toward shared blockchain infrastructure.
Stablecoins are important because they operate on a single global settlement layer and eliminate the need for intermediaries in payments and financial markets.
The key takeaway is that Stablecoins don’t just improve payments, they remove the need for fragmented financial infrastructure altogether.
2. Stablecoins are network effect businesses
Why does Tether, an unregulated stablecoin company from El Salvador, hold a 69% share of the stablecoin market? Its advantage comes from significant global liquidity.
Almost every crypto coin on every exchange is traded against USDT, tethers stablecoin. To switch or to add another stablecoin trading pair like USDC, an exchange would need to migrate thousands of trading pairs on their system and attract new liquidity. That’s a big hurdle.
A trader benefits from chosing USDT as well. If somebody wants to swap $100 million of Bitcoin for USDT—they can do so with minimal slippage or price impact. Doing the same with some other stablecoin on many exchanges would cause the price to slip more. These are real costs. It’s a reason to continue to use USDT over a (new) competitor.
So, this is the feedback loop: the liquidity attracts new market makers and trading pairs, which attract new market participants which attract new trading pairs etc. It’s a loop that is very difficult to break.
This is the reason why USDC hasn’t been able to break Tether’s market share in the crypto world. USDC share is rising, but slowly.
Q4 earnings release; USDC and USDT control 97% of the market
USDC and USDT dominate 97% of the crypto market share for a clear reason: money operates as a network business. The more individuals who use it, the greater its appeal becomes, drawing in even more users and fueling continued growth.
4. Signs that USDC is decoupling from crypto.
USDC’s main growth driver is the amount of USDC in circulation—this is called the circulating supply. As more people and institutions use and hold USDC, its circulating supply increases. For Circle, the company behind USDC, a bigger circulating supply means they earn more revenue. This is because Circle invests the reserves backing each USDC token in US treasuries (as mentioned) , so when the market cap (total value of USDC in circulation) goes up, Circle’s earnings increase as well.
Expanding the ways people and businesses use USDC helps the circulating supply grow, which directly benefits Circle’s bottom line.
In the past, the demand for USDC was closely linked to cryptocurrency trading. People use it to quickly convert their crypto into USD. During the 2022 bear market, this became clear.
Following the Terra Luna collapse and the FTX failure, Bitcoin dropped sharply, and USDC supply followed. Market cap declined from roughly $60B to below $20B as capital exited crypto and was swapped back into fiat. This showed a strong correlation: when crypto fell, USDC demand contracted.
What’s different now is the latest drawdown. Despite a ~50% decline in Bitcoin since October 6th, 2025, USDC market cap kept rising. (figure 1) This indicates that USDC serves purposes beyond just cryptocurrency-related activities.
USDC market cap keeps rising during crypto market downturn
Furthermore, usdc onchain volume saw sharp sequential increases between Q2 and Q4 of 2025. Beginning Q4 was when the crypto bear market started. Here again, it doesn’t appear that the crypto bear market interfered with the growth trend of usdc chain volume. Additional evidence that the sources of usdc volume seem more diversified than just crypto.
USDC onchain volume keeps risin despite crypto bear market in Q4 2025
In conclusion, it seems USDC is being utilized for purposes beyond cryptocurrency. As a result, Circle’s revenue is less dependent on the volatility of the crypto market, which may make it a more resilient business and potentially increase its valuation.
3. USDC is in an institutional flywheel
The implementation of the GENIUS Act in the U.S. has been a critical moment in time. By establishing a federal framework for stablecoin issuers like Circle, it effectively “de-risked” USDC for conservative institutions. Here are some recent partnerships between Circle and financial institutions:
· Deutsche Bank and Standard Chartered are developing infrastructure to facilitate the use of stablecoins as a clearing mechanism for cross-border payments. In addition, they serve as a custody and on/off-ramping partner for USDC.
· In December 2025, Visa adopted USDC for settling payments outside of conventional banking hours. It says the monthly growth is impressive and reaching 4.5 billion in annualize volume.
· Companies including Cash App, Mastercard, Gusto, and Interactive Brokers have introduced products leveraging USDC.
· USDC has become the principal collateral and settlement asset for Polymarket, which is recognized as the world’s largest prediction market.
· JPMorgan executed an end-to-end transaction for a $100 million digital token bond where the proceeds were paid to the issuer in USDC.
· Circle payments network: a visa/mastercard like network that enables payments worldwide between financial institutions is scaling pretty good. 55 institutions are enrolled in the network, 74 are in eligibility reviews. The network started in June 2025 with zero and processes $ 5.7 billion of volume now.
As you can see, institutional adoption is becoming a serious matter. In this situation, when one institution adopts USDC, others connected to it—such as counterparties, platforms, and service providers—tend to follow suit. This process makes it easier for additional institutions to join later on.
As Circle continues to expand through its various alliances, the ecosystem becomes more connected. The result is a reinforcing loop: more integrations lead to more usage, and more usage attracts new integrations.
5. A Market Built to Compound
The global money supply is estimated at roughly $120 trillion, of which around $60 trillion sits in physical cash and demand deposits—essentially payment money or working capital.
The real opportunity is not the full money supply, but this ~$60 trillion pool. It is capital that is already meant to move, making it the most immediate addressable market for stablecoins like USDC.
Against that backdrop, USDC’s ~$75 billion market cap represents just ~0.125% of this market. Even a small shift in allocation could drive a meaningful increase in circulating supply—and with it, revenue.
Growth will likely come from areas where speed, cost, and accessibility matter most: international transfers and financial settlement.
Additionally, AI can also drive the growth of USDC adoption. AI agents are able to transact instantly—paying for data, content, or services—and enable microtransactions that were previously impractical because of high fees.
If payments start to evolve in this direction, stablecoins could take a larger share of global transactions—and by extension, the money supply—driving structural demand beyond traditional stableocin use cases.
Takeaway
The core of the thesis, in my view, is fairly simple. Transacting money on a single, shared system—a blockchain—offers clear advantages, as described earlier. You effectively bypass a chain of separate databases and reduce the time required to process transactions, regardless of where they take place.
This is the reason why financial and institutional players are starting to adopt stablecoins and adjust their systems accordingly. USDC has an advantage here because it is fully regulated. In financial services, trust is critical. Once adoption starts to take hold, there is a good chance that this lead only increases, as there are few alternatives that offer the same level of regulatory clarity.
Where stablecoins were previously mainly used within crypto, use cases are now clearly broadening. Payments are one example, but the shift goes further. You are starting to see USDC being used for international transfers, on traditional platforms like Interactive Brokers, in prediction markets, and increasingly in the settlement of financial transactions.
One of the key things I look at as an investor is the size of the addressable market. The market needs to be large enough to justify the risk if things don’t play out. In this case, the potential market Circle is targeting is essentially the ~$60 trillion pool of global payment money. That is an enormous opportunity.
For that reason alone, I think this is a company worth watching closely. I currently have a small position in Circle, just a few percent—and will be following developments from here. Stay tuned.
Disclaimer
This article reflects my personal views and is for informational purposes only. It is not financial advice, and nothing here should be considered a recommendation to buy or sell any securities. Please conduct your own research and consider your own financial situation before making any investment decisions.