Circle's USDC processed more than double Tether's transfer volume in February, according to on-chain data from analytics firm Allium, even though its market capitalization is less than half of Tether's.
Total stablecoin transfer volume reached $1.8 trillion for the month - the highest monthly figure on record.
The divergence between USDC's transaction dominance and Tether's (USDT) market cap lead has drawn attention from analysts who track how capital actually moves through cryptocurrency markets.
USDC's $1.26 trillion in February transfers represented roughly 70% of all stablecoin activity on-chain.
Tether's USDt logged $514 billion over the same period - less than half USDC's total, despite holding a $184 billion market capitalization against USDC's $77.4 billion.
What the Data Shows
Simon Dedic, founder of Moonrock Capital, said on Friday that USDC has "consistently flipped" Tether in transfer volume across the past several months.
The pattern suggests that each dollar of USDC is changing hands substantially more frequently than each dollar of USDt - a dynamic driven largely by USDC's heavier use in decentralized finance protocols, where automated trading and lending recycle the same units repeatedly.
Tether, by contrast, is more commonly held as a store of value or used for payments, producing lower velocity per unit of supply.
Circle's minting activity has also accelerated. Blockchain intelligence firm Arkham recorded more than $3 billion in new USDC minted in the first week of March alone, including a single $250 million issuance on Solana on Friday.
USDt's supply remained roughly unchanged over the same period. Circle reported strong fourth-quarter 2025 earnings attributed to growth in USDC's business and expanding payments operations, according to prior coverage.
Why It Matters for Crypto Markets
Beyond the stablecoin competition itself, analysts are watching the data as a potential proxy for broader market conditions. The Stablecoin Supply Ratio - which measures Bitcoin's market capitalization relative to total stablecoin market capitalization - has been recovering after a sharp contraction in February, CryptoQuant analyst Sunny Mom said in a Friday Quicktake post, adding that the trend "shows buying power is returning to the market."
Stablecoin supply on cryptocurrency exchanges rose to a three-week high of $66.5 billion on Friday, coinciding with Bitcoin pushing toward $74,000. On March 5, stablecoins transferred to exchanges totaled approximately $5.14 billion - up from $1.14 billion on March 1, according to CryptoQuant data.
The increase in exchange-side stablecoin liquidity historically precedes periods of buying activity in cryptocurrency markets, though correlation with price movements is imperfect and the relationship does not hold consistently across all market cycles.
The February record also arrived alongside emerging regulatory activity. Florida's state Senate passed a stablecoin bill this week that now awaits the governor's signature, adding to a broader pattern of state-level regulatory movement around dollar-pegged tokens in the United States.
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