Circle's stock price halved in 45 days, accompanied by a sharp decline in USDC circulation. Data shows 75% of USDC flows through exchanges and DeFi protocols. Shrinking DeFi TVL and security incidents have amplified market concerns. While USDC is used in compliant institutional payments, its issuance growth remains heavily dependent on DeFi activity, exposing Circle's deep linkage with the DeFi ecosystem.
Circle, the issuer of USDC, saw its stock price halve in just 45 days, alongside a significant drop in USDC circulation. This trajectory underscores a core reality: USDC is deeply tied to the DeFi ecosystem. Data indicates that approximately 75% of USDC circulates between centralized exchanges and DeFi protocols.
The ongoing decline in total value locked (TVL) across DeFi markets, combined with several security incidents, has further pressured Circle's market valuation. Although USDC has carved out a role in institutional payments and compliant settlements, the token's actual issuance growth remains heavily reliant on DeFi activity. When DeFi liquidity contracts, demand and circulation for USDC suffer, making it difficult for Circle's stock to remain insulated from the downturn.
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