USDC Supply Drops $600 Million as Market Liquidity Shifts

The circulating supply of USD Coin (USDC) dropped by $600 million in the week ending October 30, according to data from Circle Internet Financial. At the end of that period, the total supply stood at nearly 75.9 billion coins, while reserve assets were valued at around $ 76.2 billion USD. This decline resulted from a higher volume of redemptions compared to new issuance during the week.

Redemptions Surpass New Issuance

Circle reported that approximately 5.1 billion new USDC tokens were minted during the same week. In contrast, redemptions totaled approximately 5.7 billion, resulting in a net decrease in supply of roughly 600 million coins. The movement reflects normal issuance and redemption activity; however, the imbalance between the two caused a visible reduction in circulation.

Huge negotiations are underway to sell the London-based stablecoin infrastructure firm BVNK to Coinbase Global Inc. at a value of approximately £ 2 billion, according to individuals familiar with the deal. The deal is still under due diligence and may be closed before the end of the year or at the beginning of 2026.

Assuming the acquisition closes, the transaction would increase Coinbase's presence in the booming stablecoin payment and infrastructure market, where financial institutions are starting to embrace blockchain-based settlement platforms.

A Push into Stablecoin Services

Their exchange, Coinbase Ventures, the investment arm of the company, already has an investment in BVNK. The potential acquisition will enable Coinbase to strengthen its position in the stablecoin ecosystem and expand its global payment coverage.

BVNK representatives were unresponsive to the requests to comment. A Coinbase representative clarified that the company does not talk about market speculation. Still, it remains open to opportunities that can support its long-term goal of making the world a more economically accessible place.

The takeover would provide Coinbase with the BVNK merchant network, compliance software, and fintech integrations, which could serve its expanding stablecoin business and payment solution.

Broader Context in the Crypto Ecosystem

The decrease in circulation suggests that some participants are exiting ‘dollar-on-blockchain’ holdings. This move could signal a shift away from or reduced exposure to crypto-native assets. It may also indicate reallocation of capital into other areas, such as traditional finance or growth-oriented crypto projects.

Yet, a shrinking supply is not inherently harmful. If users withdraw stablecoins to deploy capital into active investments, it could mark healthy liquidity movement. Conversely, if it reflects falling trading volumes, the market might face tightening liquidity.

Circle has not publicly disclosed the precise reasons for the latest decline. Market observers continue to monitor issuance and redemption flows to determine if this trend persists or reverses in the weeks ahead.

The key question remains: does the $600 million contraction reflect a short-term shift in liquidity demand or a signal of reduced stablecoin confidence across the crypto market?

Conclusion

USDC’s $600 million supply decline in late October reflects increased redemptions and evolving market demand. While the stablecoin remains fully backed, the trend highlights a shifting liquidity behavior as investors reposition themselves amid changing macroeconomic and regulatory conditions. Monitoring future issuance data remains key.

Related:  Circle’s USDC Sees $2B Supply Increase, Driving Growth in DeFi and Global Payments