Analysts at investment bank Compass Point suggest that USDC will maintain its dominance in the DeFi sector as Wall Street firms enter the space. USDC has a significant presence across decentralized exchanges and lending protocols, being the most traded asset in these environments. Circle's widespread issuance of USDC across 40 networks, made possible by proprietary technology, allows cost-effective movement of assets and mitigates hacking risks commonly associated with cross-chain transactions. Despite facing challenges from competitors like PayPal's PYUSD, which has struggled to gain traction, USDC's success is tied to its utilization in DeFi applications. However, Compass Point warns that USDC's supply is sensitive to market conditions, with potential impacts on Circle's financial stability if altcoin markets falter. They emphasize that the performance of altcoins is crucial for USDC's growth, especially post-stablecoin legislation that could bring more competition in the US market.

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