Is USDC an Underrated Crypto Play?

With the crypto market seemingly in free fall these days, it's no surprise that investors are searching for potential safe haven assets. At one time, Bitcoin (CRYPTO: BTC) was supposed to be that safe haven. But it's down more than 25% in 2026, and that hardly sounds safe to me.

So what about dollar-pegged stablecoins such as USDC (CRYPTO: USDC)? These stablecoins are specifically designed to retain their value over time. At any time, they can be redeemed 1:1 for U.S. dollars and are fully backed by cash and cash equivalents. In the current market environment, they might be a sneaky good crypto play.

Putting USDC to work

Unlike traditional cryptocurrencies, stablecoins are not designed to skyrocket in value over time. Instead, they plod along, always trading for a price of $1. While there's some wiggle room around that $1 price mark on any given trading day, the long-term average price will always converge to $1.

See for yourself. Here's a 12-month chart for USDC, and it's basically just a flat line.

That might not sound very exciting. Who wants to invest $1 into a crypto black box, and pull out $1 at some time in the future? In fact, on second thought, that sounds like a terrible investment.

Image source: Getty Images.

But here's the thing: Stablecoin investors can generate yield on their USDC holdings, just like they can on traditional bank deposits. And, given the efficiencies of blockchain technology and a bit of clever financial engineering, those yields can often far exceed those offered by traditional banks.

Moreover, it's possible to put that USDC to work on various decentralized finance (DeFi) platforms. There, you can lend out your USDC for an even higher yield. On Coinbase Global (NASDAQ: COIN), for example, those yields might be as high as 10%. Earning 10% a year by holding dollars sounds good to me.

How to invest in the USDC blockchain ecosystem

This is really just scratching the surface of why USDC might be an underrated crypto play. That's because there are several publicly traded companies with their future revenue streams increasingly tied to USDC.

The most important of these companies is Circle Internet Group (NYSE: CRCL), the creator of the USDC stablecoin. There's also Coinbase, which has made USDC the stablecoin of choice for its cryptocurrency platform. Investing in either of these two companies will give you access to even more upside potential tied to the future growth of USDC.

At a time when nearly every major cryptocurrency is down big for the year, I'm expecting there to be even more conversations about stablecoins. They could be one way to preserve your capital when the crypto market is going through a rough patch. With that in mind, I'm putting USDC on my crypto shopping list in 2026.

Dominic Basulto has positions in Bitcoin, Circle Internet Group, and USDC. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.