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Kaiko Analytics, a market intelligence platform, has released a report indicating a decline in Tether's (USDT) stablecoin dominance due to the emergence of new competitors.
In the report titled “Tether Loses Market Share,” Kaiko Analytics notes that Tether’s market share over centralized exchanges has dropped by 13% YTD. This decline is attributed to the growing popularity of rival dollar-pegged digital assets like FDUSD and USDC.
The report highlights that USDT’s market share on CEXs has decreased from 82% to 69% YTD. This trend is partially attributed to increased competition from stablecoins like FDUSD, which benefit from Binance’s zero-fee promotions. USDC has also seen a rise in its market share, reflecting a growing preference for regulated alternatives. Currently, stablecoins issued in the US account for 10% of the overall stablecoin trade volume.
Among the top five stablecoins by market cap, only Circle’s USDC is regulated under state US money transmitter frameworks. However, its market share has increased from less than 1% in 2020 to 11% today.
Kaiko also suggests that other competitors such as Ethena (USDe), which offers unique yield opportunities, may contribute to Tether’s declining market dominance. Ethena’s USDe volume has grown significantly since its launch in February, although it has decreased from April’s peak of over $800 million following Ethena’s ENA airdrop.
Despite these challenges, Tether’s 2024 Attestation Report indicates a record-breaking $4.52 billion in profits during the first quarter of the year.