Circle's stock price halved in just 45 days, while USDC's circulating supply also dropped significantly. Market analysis suggests this is not an isolated event but a direct reflection of Circle's deep integration with the DeFi ecosystem. Data shows that 75% of USDC flows through exchanges and DeFi protocols, with its circulation closely correlated with DeFi total value locked (TVL). The recent contraction in TVL, coupled with multiple security incidents, has further heightened market concerns about demand for USDC.
Although Circle has made inroads into compliant areas such as institutional payments, where USDC is used, the actual growth in its issuance still heavily depends on the vitality of the DeFi ecosystem. If the DeFi market continues to languish, USDC's circulating supply may face further pressure, potentially impacting Circle's revenue and valuation. The sharp volatility in Circle's stock price essentially serves as a leading indicator of DeFi market sentiment.