Market
USDC Hits $23 Billion Trading Volume: Here’s How
Trading volume for USDC stablecoin has soared to $23 billion a year. This growth comes amid a growing demand for transparency as traders gravitate towards regulated stablecoin alternatives.
MiCA framework’s implementation was an important development, with qualified stablecoin issuers receiving a fully revamped manual.
USDC Leads Demand For Regulated Stablecoins With $23 Billion Trading Volume
A Kaiko report indicates that the weekly trading volume for Circle’s USDC stablecoin has surged in 2024. This more than doubles the $9 billion recorded last year and nearly five times the $5 billion seen in 2022.
The growth in trading volume has propelled USDC to challenge the 14% market share that the reserve-backed stablecoin First Digital USD (FDUSD) boasts. Based on the report, centralized exchanges (CEX) account for most of these volumes, compared to decentralized (DEX) alternatives.
According to the report, USDC and its sister, the Euro-denominated EURC stablecoin, have witnessed the strongest daily trading volume since June 30, when the first part of the MiCA framework went into effect in the European Union.
SocGen’s Euro CoinVertible (EURCV) stablecoin also saw significant volume. However, it was not as much as the EURC, given it is only available on Bitstamp exchange.
Notable volume upticks, coupled with the role of CEXes in driving the interest, suggest a growing interest in compliant stablecoins. This is compared to their non-compliant counterparts, which currently dominate the market with 88% of total stablecoin volume. Nevertheless, the report alludes to the possibility of MiCA turning the tables in favor of the compliant stablecoins.
“The share of compliant stablecoins has increased over the past year, suggesting increased demand for transparency and regulated alternatives. So far, this trend has mostly benefited USDC,” an excerpt in the Kaiko Research read.
Also Read: What Is Markets in Crypto-Assets (MiCA)? Everything You Need To Know
MiCA Framework Could Shift the Balance in Favor of Compliant Stablecoins
The MiCA framework’s implementation in Europe on June 30 was a landmark development in the stablecoin market. With its implementation, stablecoin issuers received a fully revamped manual with specific requirements like “whitepaper publication, governance, reserves management, and prudential standards.”
Circle secured an Electronic Money Institution (EMI) license on July 1, a day after MiCA implementation. EMI license is a requirement for any issuer looking to offer dollar- and euro-pegged crypto tokens in the EU. It permits the firm to “onshore” its Euro-denominated EURC stablecoin to customers within the bloc.
Indeed, MiCA compliance is driving the popularity of the USDC stablecoin. The stamp of trust provides more tailwinds for more usage of the stablecoin for perpetual futures settlement, Kaiko Research noted. Institutional investors, for instance, who have their own compliance requirements when participating in derivatives markets, may look to such thresholds when exploring stablecoin choices.
“USDC’s market share in these perpetual markets is just a fraction of USDT’s. Its growing usage for perpetual settlement speaks to investors’ changing preferences as stablecoin regulations come into effect.”
A webinar hosted by SOLIDUS LABS indicated that the second part of the framework would address the prevention and prohibition of market abuse. It will be fully applicable by December 30, 2024. To navigate these regulatory changes successfully, engaging in proactive preparation, establishing strong internal policies, and implementing sophisticated surveillance systems will be critical.
Jeremy Allaire said the two stablecoins are primed to thrive under the new framework based on the firm’s compliant track record. According to the Circle CEO, this record of accomplishment positions both stablecoins for more success in the stablecoin market.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
USDC’s main market rival in the stablecoin market, Tether’s USDT, is not EMI-licensed. Its CEO, Paolo Ardoino, is still unconvinced by MiCA’s expectation of 60% backing in bank cash.
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Ethereum price started a fresh increase above the $2,720 resistance. ETH is up over 10% and now approaches the key barrier at $3,000.
- Ethereum started a fresh surge above the $2,720 resistance zone.
- The price is trading above $2,750 and the 100-hourly Simple Moving Average.
- There is a new connecting bullish trend line forming with support at $2,820 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair could continue to rise if it clears the $2,950 resistance.
Ethereum Price Extends Its Increase
Ethereum price started a fresh increase above the $2,650 resistance like Bitcoin. ETH was able to climb above the $2,720 and $2,750 resistance levels to move further into a positive zone.
It even surged above the $2,850 level in the past few sessions, beating BTC. It is up over 10% and there was a move above $2,920. A high is formed at $2,955 and the price is showing signs of more upsides. It is well above the 23.6% Fib retracement level of the upward move from the $2,355 swing low to the $2,955 high.
Ethereum price is now trading above $2,800 and the 100-hourly Simple Moving Average. There is also a connecting bullish trend line forming with support at $2,820 on the hourly chart of ETH/USD.
On the upside, the price seems to be facing hurdles near the $2,920 level. The first major resistance is near the $2,950 level. The main resistance is now forming near $3,000. A clear move above the $3,000 resistance might send the price toward the $3,120 resistance.
An upside break above the $3,120 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $3,250 resistance zone.
Are Dips Limited In ETH?
If Ethereum fails to clear the $2,950 resistance, it could start a downside correction. Initial support on the downside is near the $2,850 level. The first major support sits near the $2,820 zone and the trend line.
A clear move below the $2,820 support might push the price toward $2,720. Any more losses might send the price toward the $2,650 support level in the near term. The next key support sits at $2,550.
Technical Indicators
Hourly MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.
Hourly RSI – The RSI for ETH/USD is now above the 50 zone.
Major Support Level – $2,820
Major Resistance Level – $2,950
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BNB price struggled to stay above the $600 zone. The price is consolidating gains and might aim for a fresh increase above the $605 level.
- BNB price started a downside correction from the $612 resistance zone.
- The price is now trading above $590 and the 100-hourly simple moving average.
- There is a connecting bullish trend line forming with support at $595 on the hourly chart of the BNB/USD pair (data source from Binance).
- The pair must stay above the $588 level to start another increase in the near term.
BNB Price Holds Support
After a close above the $585 level, BNB price extended its increase. However, upsides were limited above $610 and the price remained capped unlike Ethereum and Bitcoin.
There was a move below the $605 and $600 levels. The price even dipped below the 23.6% Fib retracement level of the upward move from the $543 swing low to the $611 high. However, the price is now holding gains above the $580 level.
The price is now trading above $595 and the 100-hourly simple moving average. There is also a connecting bullish trend line forming with support at $595 on the hourly chart of the BNB/USD pair.
If there is a fresh increase, the price could face resistance near the $605 level. The next resistance sits near the $612 level. A clear move above the $612 zone could send the price higher. In the stated case, BNB price could test $620. A close above the $620 resistance might set the pace for a larger move toward the $632 resistance. Any more gains might call for a test of the $650 level in the near term.
More Losses?
If BNB fails to clear the $605 resistance, it could start another decline. Initial support on the downside is near the $595 level and the trend line. The next major support is near the $578 level or the 50% Fib retracement level of the upward move from the $543 swing low to the $611 high.
The main support sits at $570. If there is a downside break below the $570 support, the price could drop toward the $560 support. Any more losses could initiate a larger decline toward the $550 level.
Technical Indicators
Hourly MACD – The MACD for BNB/USD is losing pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for BNB/USD is currently below the 50 level.
Major Support Levels – $595 and $578.
Major Resistance Levels – $605 and $612.
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