USDC earnings on a leading compliant platform recently dropped to 3.5%, and it looks like there's more room to fall. The main reason is crystal clear — expectations for Federal Reserve rate cuts are becoming increasingly certain, which directly suppresses the ceiling for stablecoin yields across the board.

Wait, let's think about this again. An incoming rate-cutting cycle means market liquidity will be abundant, borrowing costs will naturally decline, and stablecoin yields getting squeezed is the inevitable logic. Those high-yield days in the past were actually products of a high-rate environment — now that the rate cycle is reversing, this adjustment was bound to happen sooner or later.

For people holding stablecoins, this signal is actually quite significant. If you're still counting on earning a living from pure USDC yields, it's going to get tougher and tougher.