USDC is bouncing back with smart contract surge, here's why

USDC experienced an increase in its supply of smart contracts, reaching a six-month high of 42.08%.

USDC is more extensively utilized for smart contract-related transactions than other stablecoins such as USDT.

According to data from blockchain analytics firm Glassnode, USDC - one of the most commonly utilized stablecoins - has experienced an increase in its supply within smart contracts.

This positive development starkly contrasts the coin's recent struggles and marks a notable deviation from other stablecoins as well.

USDC gets smart contract boost

Glassnode's latest report on 27 March highlighted a promising surge in the percentage of USDC supply held in smart contracts. The data indicated that the percentage has risen to 42.08%, as depicted in the chart. It marks a significant increase, reaching a six-month high for the stablecoin.

Source: Glassnode

Upon closer examination of the chart, it becomes evident that the metric experienced a decline towards the end of 2022. It has since picked up momentum and started an upward trend in March. It maintained its growth even during the recent bank run, resulting in FUD around it.

USDC vs. USDT supply in smart contracts

The recent increase in USDC supply held in smart contracts becomes even more significant when compared to USDT. According to data from Glassnode, the percentage of USDT supply in smart contracts as of this writing was 14.0%, with the highest percentage this year reaching only 14.7%. It indicated that USDC was more extensively being utilized for smart contract-related transactions.

Source: Glassnode

A look at other metrics

An analysis of the Exchange netflow volume comprising both inflow and outflow indicated that USDC had been experiencing a steady and robust flow across all exchanges.

However, the outflow volume has been notably higher recently and stood at over 55 million, as of this writing.

Source: Glassnode

Furthermore, according to Santiment's transaction volume data, it has been exhibiting normal transactional activity for a stablecoin, with a volume of around $1.4 billion as of this writing.

Additionally, as per CoinMarketCap, USDC's market capitalization was over $33 billion. Thus, positioning it as the fifth-largest cryptocurrency at press time.

Source: Santiment

In another notable development, MakerDAO recently passed a proposal affirming USDC as its primary reserve. The move indicated a vote of confidence in the stablecoin.

Moreover, the recent surge in DeFi protocols has likely contributed to the increasing supply of the stablecoin held in smart contracts.

USDC is recovering well from the setback it faced earlier in the month. It is also displaying signs of growth and stability in the digital currency market.

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