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- The stablecoin landscape is shifting amid regulatory differences.
- While USDT remains the leader, USDC is gradually assuming parts of its market share.
The stablecoin ecosystem is currently experiencing a repositioning with Circle’s USDC dominating, while Tether’s USDT declined to 74%. This reposition has raised concerns about what could be causing the drain in the Tether’s market share.
Realignment in the Stablecoin Market
Over the past few years, Tether has been the dominant player in the stablecoin market. Despite its dominance, the stablecoin appears to be losing its crown to its competitors, especially USDC.
Kaiko Research highlighted this shift in its second quarter 2024 Crypto Market Report. According to the insight, the market share dropped to 74% in 2024, from 82% in 2023. Also, USDT’s 24-hour trading volume declined by 8.8% to $38.65 billion.
On the other hand, USDC’s weekly trading volume surged to $23 billion in 2024, up from $9 billion in 2023 and $5 billion in 2022. As a result, USDC’s market share recently reached a record high, nearing FDUSD’s 14%.
In the last 24 hours, USDC’s trading volume increased by 38% to $5 billion, according to our data. USDC is now the 6th largest traded cryptocurrency with its market capitalization pegged at $33 billion.
The decline in Tether’s market share is due to an increased shift in market sentiments and regulation on stablecoins. For instance, other stablecoins like FDUSD have emerged, shifting users’ attention from USDT. As highlighted in our earlier article, OKX delisted USDT for users in both the European Union and the European Economic Area.
This shift in market sentiments and regulation on stablecoins has made room for transparency and regulated alternatives like USDC. Centralized Exchanges (CEXs) have also played a major role in USDC’s soaring volumes over the past year.
USDC’s market share on CEXs increased from an average of 60% to over 90% across all exchanges, particularly after Binance re-listed it in March 2023. Besides Binance, USDC’s volumes have also risen on Bybit, according to the report.
As a reminder, Bybit has offered zero-fee USDC trading since February 2023. In a recent update we covered, Bybit has taken a step further with a new campaign known as EUR Zero Fees Fiesta.
The increased usage of USDC for perpetual futures settlement has also contributed to the rise in market share. The share of Bitcoin perpetual denominated in USDC, traded on Binance and Bybit, rose from 0.3% to 3.6% in January.
USDT Minting Suspended Across Major Blockchains
Tether is expected to suspend USDT redemptions across major blockchains by September 2025, according to official reports. On social media platform X, Francesco spotlighted this update, stating,
“Tether has announced that it will stop minting USDT on EOS and Algorand as of today.”
Tether has announced that it will stop minting USDT on EOS and Algorand as of today. However, USDT redemptions on these blockchains will continue for the next 12 months. This move follows Tether’s discontinuation of USDT on Bitcoin, Kusama, and Bitcoin Cash in August 2023.
— Francesco Trading Advisor (@FrancescoTradi2) July 5, 2024
Francesco, however, noted that USDT redemptions on these blockchains will continue for the next 12 months. This development aligns with Tether’s discontinuation of USDT on other blockchains such as Bitcoin, Kusama, and Bitcoin Cash in August 2023.