Stock and USDC Supply Both Halved
Circle, the issuer of USDC, saw its stock price halve within 45 days while USDC's circulating supply dropped sharply. This is not an isolated event but reveals the company's deep entanglement with the DeFi ecosystem: approximately 75% of USDC circulates on exchanges and decentralized protocols.
DeFi Dependency Amplifies Risk
As DeFi total value locked (TVL) continues to shrink, compounded by multiple security incidents, market concerns over USDC demand and Circle's profitability have intensified. The growth of USDC issuance relies heavily on DeFi trading and lending activity; when on-chain activity fades, capital quickly exits.
Compliance Use Cases Can't Fill the Gap
Although USDC is used in regulated scenarios like institutional payments and cross-border settlements, these channels are not large enough to offset the downturn in DeFi. Circle's stock has become a barometer for crypto market sentiment: when DeFi cools, Circle falls first.