Circle’s market value dropped sharply in June as the supply of its stablecoin, USDC, fell to $73.6 billion on June 25, down about $7 billion from its peak. The company’s stock declined nearly 50 percent over the same period, trading around $63, in line with a broader slowdown across decentralized finance.
The pullback highlights how closely Circle’s performance tracks activity in digital asset markets rather than steady growth in payment usage.
Usdc decline outpaces usdt
The contraction in USDC supply has been steeper than that of its main competitor. USDT supply fell by $4.7 billion from a high of $191 billion to $186.3 billion, a drop of roughly 2.5 percent.
Data shows that about 75 percent of USDC is held within exchanges and decentralized finance applications. This indicates that most of its usage is tied to trading, liquidity provision, and yield strategies rather than everyday payments by businesses or consumers.
Supply remains highly concentrated
Blockchain data from Ethereum points to a highly concentrated ownership structure. The top 100 addresses control more than half of all USDC in circulation, while just 0.32 percent of holders account for 93.55 percent of the total supply.
Most of these holdings sit in smart contracts, bridge wallets, and exchange reserves. These are typically used for generating yield or supporting trading activity, reinforcing the token’s dependence on DeFi conditions.
Strong link to crypto market activity
Research by analyst Engel found a 0.66 correlation between USDC circulation and Ethereum prices between October 2025 and January 2026. This suggests that issuance expands and contracts alongside broader crypto market activity.
Engel described Circle as a proxy for decentralized finance conditions rather than a pure payment network, highlighting its reliance on speculative and on-chain activity.
Defi downturn adds pressure
Circle’s stock decline also followed a drop in total value locked across DeFi protocols after the Kelp DAO breach in mid-April. The incident triggered a wave of risk reduction, with capital flowing out of decentralized platforms.
Circle’s shares began falling about a month later, tracking the continued slowdown in DeFi participation and liquidity.
Partnerships aim to support demand
In response, Circle and Coinbase partnered last month to use USDC as the settlement currency on Hyperliquid. The deal required both firms to stake 500,000 HYPE tokens each and give up 90 percent of yield from USDC reserve assets.
The move is aimed at maintaining USDC usage in markets where DeFi activity has weakened. USDC is also used as a settlement asset on platforms such as Lighter and others.
Usage remains tied to on-chain activity
Artemis reported that in 2025, USDC recorded $18.3 trillion in organic transaction volume, excluding internal transfers and bot trading. This compares with $13.2 trillion for USDT.
Despite strong transaction figures and adoption in compliant payment settings, issuance growth continues to depend largely on speculative on-chain use rather than real-world payment demand. This leaves Circle exposed to shifts in DeFi activity and protocol performance.
Outlook depends on broader adoption
Circle’s future performance will likely depend on whether it can expand USDC beyond DeFi-driven cycles. Strengthening its role in everyday payments and cross-border transactions may be key to more stable growth.
Current market trends suggest that consistent real-world usage, rather than reliance on trading activity, could determine the company’s next phase.
To understand stablecoins’ shifting role in payments and DeFi, explore how 2026 could redefine global stablecoins now.
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