Yesterday Jeremy Allaire, CEO and co-founder of Circle, a cryptographic company involved in the issuance and management of the stablecoin USD Coin (USDC) published a post on X in which he explains to be “more bullish than ever on the crypto sector”.
In particular, according to what was reported by the American entrepreneur, stablecoins could reach up to 10% of the total value of the world’s economic money, establishing themselves as the dominant asset class for digital payments.
Let’s see all the details below.
Jeremy Allaire of Circle on the future of crypto: stablecoins like USD Coin will represent 10% of the world’s economic money
Jeremy Allaire, CEO and co-founder of Circle, stated in a post on X that he is particularly optimistic about the future of both stablecoins and crypto in its broader sense.
The highest representative of the stablecoin USD Coin (USDC), CEO of Circle, argues that the development of decentralized payment systems that use cryptocurrencies as the underlying exchange asset can drive the social and economic development of the entire world, just as the internet did with the birth of networks and the empowerment of open software.
Allaire also believes that blockchain technology is ready with its applications to reach a large scale, now that it has reached its third generation phase while more and more developers are working to explore and improve possible integrations with the real and digital world.
The patron of Circle is confident that, despite the crypto industry still being in the early stages of its establishment in the global financial landscape, we could witness a true wave of mass adoption and technological growth in the next decade.
According to him, the adoption of cryptocurrencies could increase to “ billions of users” on “millions of applications” in the next 10 or more years, with much more trading activity on decentralized exchanges executed by smart contracts on public blockchain infrastructures.
Here is how it begins in the post published:
“I am more bullish than I have ever been about crypto”
I’m more bullish than I have ever been about crypto.
I have been building @Circle for over 11 years, and at no time have I been more optimistic than right now.
I also believe that the overwhelming majority of people have an extremely narrow and limited understanding of what’s…
— Jeremy Allaire (@jerallaire) June 19, 2024
Allaire, after a long experience in the world of the internet for 35 years and after working for over a decade on the development of the USD Coin (USDC), has come to the conclusion that in the future stablecoins will represent 10% of “global economic money” and will be used daily for common payments.
The founder of Circle focused on the fact that most digital payment companies are working to include blockchain technology around their infrastructures, with the intent of leveraging the trustless advantages of public chains and the scalability of stablecoins.
The next 10 years will be crucial according to him for the evolution of the crypto payments landscape: the addressable market size is in the order of billions of dollars, with banks that could leverage an efficient means for sending remittances and reducing the costs of cross-border trade.
By 2035 Allaire expects a stablecoin market of 100 trillion dollars, with the credit intermediation market gradually shifting from fractional reserve lending to on-chain credit markets.
In order for the optimistic forecast of 10% by the head of Circle to become reality by 2034, the stablecoin market should grow at least with a compound annual growth rate of 47.7%, although the estimate does not take into account the growth of the 80 trillion dollar money market.
According to data from World Population Review, the current stablecoin market, which amounts to 162 billion dollars, represents just 0.2% of the size of the money market.
The market share of USDC and the possible growth in Europe in the coming months
At the time of writing the article, USD Coin (USDC) managed by Circle, represents the second cryptocurrency in the world by market capitalization, with a value of 34.5 billion dollars, second only to Tether, which leads the ranking with 117.6 billion dollars.
Counting only the digital environment of the blockchain of Ethereum, USDC increases its market share by encompassing 26.8% of the entire supply of stablecoin distributed on ERC-20 tokens, with USDT maintaining the lead despite a slight reduction.
DAI, FDUSD, TUSD, PUYSD and USDe are the stablecoins that follow the top two stable coins in the crypto market, but they differ significantly from the market shares of USDC and USDT.
It is worth noting how Circle’s currency, despite having a smaller market capitalization compared to the stablecoin competitor of tether, boasts a significantly higher monthly trading volume throughout 2024.
Especially from April onwards, the volumes in USDC have more than tripled compared to those recorded in USDT, supporting the fact that the former is more frequently used for on-chain transactions, while the latter finds greater utility in CEX and offshore exchanges.
In all this, the data from “visaonchainanalytics” show how the number of transactions executed on both fronts is more or less similar, therefore this means that the users of USDC have used larger amounts.
In the coming months, the gap between the two big stablecoins in the sector could further reduce, especially in the European territory where the MiCA (Markets in Crypto Assets) regulation is officially coming into effect on June 30, 2024.
With MiCa, several stablecoin issuers, including Tether, would encounter various compliance problems with the new regulation and could be excluded from the crypto exchange markets: in this regard, OKX and UpHold have already confirmed the delisting of USDT in their trading pairs.
USDC seems to be the only stable coin in the crypto landscape that fully meets the criteria imposed by MiCa, and consequently has a good chance of being advantaged in Europe compared to its competitors.
In this sense we expect that the marketcap of USDC will rise in the coming months, to the detriment of that of USDT and other stablecoins that could register some losses.
— Jeremy Allaire (@jerallaire) June 19, 2024
In the world of finance, the terms “bull” and “bear” are often used to describe market trends. A “bull” market is characterized by rising prices, while a “bear” market is marked by falling prices. Understanding these concepts is crucial for investors.