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The crypto market is witnessing a paradoxical instance where the major asset of a company was declining while it planned to go public. This clearly indicates Circle and its stablecoin USD Coin (USDC). Given the latter is on continuous downtrend, the issuer company reported to reevaluate the plan to go public.
Circle’s Pullback on Going Public
Circle recently announced its intention to step back from the plan of a special purpose acquisition company (SPAC) with its partner Concord. The company anticipated going public and affirmed that it still holds it but thinks to fulfill it in future. While the third quarter of 2022 remained the first quarter of the company reporting profits.
Circle CEO, Jeremy Allaire, showcased the disappointment regarding the cancellation of the proposed transaction. Yet he ensured that the company will still hold the anticipation to go public as a core strategy of Circle in order to enhance trust and transparency.
Losing Dominance in Stablecoin Sphere
Arcana Analytics CEO Rich Falk-Wallace cited USDC’s losing market share amidst the others growing during the same time as the reason for Circe to make efforts seeking to go public. While the market share decrease and increase of stablecoins was said to depend upon the location of issuer and their interaction in the broader crypto market.
Circle’s USDC is the second largest stablecoin within the crypto market in terms of market capitalization. The stablecoin found it tough to compete for quite some time. Main competitors of the stablecoin—USDT and BUSD—had witnessed growth in contrast. USDC lost its market dominance following a drop in market share.
Data shows Circle’s stablecoin was holding about 37% of the stablecoin market share about six months ago. Now it stands at only 31%. Biggest stablecoin in the crypto market USDT dominates the space with 47% of market share while BUSD holds about 16%. During the same time frame, both the stablecoins witnessed growth of 4.5% and 1% respectively.
Strong Foothold in DeFi But Distant from CeFi
USDC has its dominance in the decentralized finance (defi) sector in contrast to existing competition. However, the recent past data of activity in the defi sector also does not reflect any good. During the last six months trading volumes in defi are down by approx 30% in comparison to trading volumes in cefi platforms.
According to Fallk-Wallace, the share of USDC is low in the centralized finance sector due to competition’s share within the space given their centralized issuers’ dominance.
The stablecoin, although, seeks to expand to different blockchains yet Ethereum seems to have its most of the supply. Ethereum network has approx 77% over overall circulating supply of USDC while it has only 40% of USDT.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
