Apple’s Partnership with Circle (USDC) Could Open $15.7 Trillion Market For Ethereum

Circle to Launch USDC Payments on Apple Devices

Circle CEO Jeremy Allaire recently hinted at a transformative development in digital payments. Following Apple’s decision to open the iPhone’s NFC payment functionality to third-party developers, Allaire hinted that tap-to-pay payments using Circle’s USDC stablecoin are “incoming soon.”

This development has the potential to significantly impact ETH prices as USDC is built on the Ethereum blockchain.

Via a X(Formerly Twitter) post, on August 14, 2024, Allaire urged wallet developers to “start engines,” signaling the imminent arrival of USDC payments on Apple devices.

He clarified that while Circle has no direct relationship with Apple, the NFC upgrade allows Web3 and crypto wallets to use the NFC technology for transactions.

This could enable a user experience where an iPhone wallet supporting USDC allows for payments via a simple tap. The iPhone’s FaceID system could confirm the payment and initiate a blockchain transaction to settle the USDC payment.

Allaire highlighted that this innovation could open up a powerful pathway for direct-to-merchant USDC payments, as well as other uses such as NFTs for tickets and certificates.

The prospect of integrating USDC into Apple’s vast ecosystem is particularly exciting for Ethereum investors as well as the cryptocurrency sector at large.

USDC Could Open Up $7.4 Trillion Market For Ethereum

NFC, or Near Field Communication, represents a cutting-edge technology that has revolutionized payment systems. NFC payments allow consumers to effortlessly complete purchases by tapping or waving their NFC-enabled cards, smartphones, or wearable devices near a contactless payment machine.

The global NFC payments market size was valued at $25.8 billion in 2022, and is projected to reach $507.1 billion by 2032, growing at a CAGR of 35.9% from 2023 to 2032.

This innovative payment method simplifies the process for retailers and promotes financial inclusion. The integration of USDC with NFC payments on Apple devices could signal a paradigm shift, particularly for the Ethereum network, where USDC is primarily utilized.

As one of the leading stablecoins, USDC is poised to capitalize on the growing NFC market, which is expected to hit a $507 billion valuation by 2033—larger than Ethereum’s and USDC’s combined market caps, which currently stand at $314 billion and $34 billion, respectively.

According to Juniper Research, the total transaction value for global contactless payments is projected to grow from $7.4 trillion in 2024 to $15.7 trillion by 2029, representing a 113% increase over the forecast period.

This significant growth underscores the massive potential of NFC technology, and the integration of USDC into this ecosystem could enable Ethereum to tap into this expanding market. With the projected increase in contactless payments, the ability for USDC to capture even a fraction of this market could lead to a substantial increase in Ethereum’s network activity and value.

If USDC can capture just 2% of the daily $7.4 trillion contactless payment sector, it If USDC can capture just 2% of the daily $15.7 trillion contactless payment sector, it would add approximately $314 billion in annual transactions. This influx could significantly impact Ethereum’s price, as higher transaction volumes on the Ethereum network would increase demand for ETH, driving up its value. Each USDC transaction requires ETH to pay for gas fees, thereby adding value to the Ethereum network with every transaction.

3 Ways Circle (USDC) and Apple Partnership Could Impact Ethereum Price

The partnership between Apple and Circle could have a transformative impact on Ethereum’s price through increased demand for USDC, broader Ethereum adoption, and enhanced network effects and developer activity.

Increased USDC Demand and Usage:

USDC is an Ethereum-based stablecoin, and with the potential for tap-to-pay transactions on iPhones, demand for USDC could rise significantly. The ability to use USDC for everyday transactions through Apple devices could drive widespread adoption among consumers and merchants. This increase in USDC usage would likely lead to higher transaction volumes on the Ethereum network, as each transaction requires ETH for gas fees.

According to recent data, the average daily trading volume for USDC has hovered around $8 billion in 2024. Comparing this to the total projected transaction value in the contactless payments market, USDC’s integration into this sector could dramatically increase its transaction volume, leading to a higher demand for ETH.

As of August 2024, the global equity markets are valued at $109 trillion, while the cryptocurrency market stands at $2.09 trillion, making up approximately 2% of the total.

Extrapolating, if USDC can capture just 2% of the projected $15.7 trillion annual volumes in the contactless (NFC) payment sector by 2029, it could Circle could bring around $314 billion more in annual transactions to the Ethereum ecosystem.

Enhanced Ethereum Adoption

The seamless integration of USDC with iPhone NFC payments could encourage broader adoption of Ethereum-based applications. As USDC transactions become more mainstream, users may begin exploring other Ethereum-based services, further driving activity and value to the Ethereum ecosystem.

Ethereum’s price and adoption are closely linked, and as more addresses hold ETH, the network’s value tends to rise.

In 2024, Ethereum has seen significant growth in funded addresses (non-zero balance addresses), which is a bullish indicator for ETH’s price. The potential collaboration between USDC and Apple could spur further increases in funded addresses, indicating broader adoption and higher demand for ETH.

This massive increase in transaction volume would likely have a significant impact on Ethereum’s price. Given that each USDC transaction requires ETH for gas fees, the surge in USDC activity would boost demand for ETH.

As more users engage with the Ethereum network, the increased activity could drive up ETH’s price, creating a positive feedback loop that attracts even more users and developers to the platform.

Network Effects and Developer Activity:

This development could spark greater interest among developers to create more apps and services that leverage Ethereum’s capabilities, particularly in decentralized finance (DeFi) and payments.

Ethereum’s total value locked (TVL) in DeFi currently stands at $48.89 billion, reflecting substantial growth in 2024. Despite Ethereum’s price growth in 2024, TVL growth has outpaced it, suggesting that ETH may be undervalued.

Hence, the heightened demand from the USDC payments on Apple devices would translate into more transactions on the Ethereum network, and ultimately increase in ETH prices.

The potential integration of USDC with Apple could boost TVL further, positioning Ethereum for explosive growth during the next market rally phase. As Ethereum’s ecosystem expands, the network effects could strengthen, leading to increased demand for ETH as developers and users flock to the platform.

Furthermore, increased USDC transactions would enhance Ethereum’s liquidity, improve network security, and solidify its position as the leading blockchain for decentralized finance (DeFi) and stablecoin transactions, potentially leading to substantial price appreciation for ETH.

Recap:

Apple’s potential collaboration with Circle to integrate USDC into its NFC payment system could have profound implications for Ethereum.

Allaire highlighted that this innovation could open up a powerful pathway for direct-to-merchant USDC payments, as well as other uses such as NFTs for tickets and certificates. The prospect of integrating USDC into Apple’s vast ecosystem is particularly exciting for Ethereum supporters. As more users adopt USDC through Apple devices, the demand for transactions on the Ethereum network could surge, positively impacting the price of ETH.

This development comes after years of regulatory pressure on Apple to open its NFC chip to increased market competition.

Apple’s recent move represents a significant shift in its strategy, potentially ushering in a new era for mobile payments and digital currencies.

As Apple prepares to roll out these changes in select markets, developers are being encouraged to upgrade their apps to support USDC, positioning Ethereum for broader adoption and higher transaction volumes.

With Ethereum’s price at $2,600, up 16.5% for the year, the potential to tap into a $15.7 trillion contactless payment market could drive significant growth.

As USDC usage increases, ETH demand will likely rise, spurred by enhanced adoption, network effects, and developer activity. This partnership could position Ethereum for substantial growth in the coming years, with USDC at the forefront of this transformative shift in the digital payments landscape.