Woofun AI reports that Circle's stock price plummeted by half in just 45 days, reaching approximately $63 in June 2026. This equity collapse coincided with a $7 billion reduction in USDC circulation, which dropped to 73.6 billion by June 25 local time in the United States. In contrast, USDT circulation declined only $4.7 billion from a peak of 191 billion to 186.3 billion, a decrease of less than 3%.

Analyst Ed Engel from Compass Point characterizes Circle as a barometer for DeFi activity, citing a 0.66 correlation coefficient between USDC circulation and ETH prices between October 2025 and January 2026. Data compiled by Woofun AI shows that 75% of USDC resides on cryptocurrency exchanges and DeFi protocols rather than in daily transactions or cross-border payments. On Ethereum, concentration is extreme: the top 100 addresses hold over 50% of the supply, while 0.32% of addresses control 93.55% of the total amount.

Structurally, USDC is heavily utilized within protocols to generate earnings, making it sensitive to market downturns. Conversely, USDT maintains a solid foundation in practical applications like salary payments, foreign trade settlements, and deposit protection in third-world countries. This utility explains why USDT shrinks less during volatility, a view supported by the fact that the price of USDT in India trades 8% higher than its normal level.

The broader trend began after the attack on Kelp DAO in mid-April 2025, triggering a decline in total value locked up in DeFi platforms. Circle's stock price followed suit, starting its descent in mid-May and maintaining similar trends thereafter. Previously, Circle and Coinbase collaborated to promote USDC as a settlement asset on Hyperliquid, staking 500,000 HYPE tokens each and surrendering 90% of profits generated by USDC reserves on the platform.

USDC also serves as a settlement asset on platforms such as Lighter and functions as an "intermediate state" in institutional fund transfers to reduce interbank costs and time. Artemis data indicates that in 2025, the "organic transaction volume" of USDC was 18.3 trillion compared to 13.2 trillion for USDT.

However, without an increase in USDC supply, Circle faces significant hurdles in boosting revenue and profits.

The immediate market focus remains on whether DeFi can resolve the "mismatch between returns and risks" to restore confidence. This equity contraction marks a critical divergence between speculative stablecoin utility and real-world payment adoption.