- Tether retains a 66% market share of US dollar-pegged stablecoins, far ahead of rivals.
- Regulatory clarity has helped USDC grow faster since November 2024, but challenges persist.
What happened: Tether maintains market lead with strong on-chain activity
Tether’s USDt continues to dominate the stablecoin market, despite facing growing competition from emerging issuers, according to a new report from Web3 research firm Nansen. As of 25 April, USDt holds around 66% of the market share among US dollar-pegged stablecoins, with Circle’s USDC trailing at roughly 28%. Ethena’s USDe stablecoin is a distant third, accounting for just over 2%.
Even though USDC has outpaced USDT in growth since November, Nansen anticipates Tether’s lead will remain strong. Tether’s on-chain activity is unparalleled, with nearly three times as many users as Uniswap and over 50% more transactions than any other decentralised app, according to the research.
In addition, Tether has been highly profitable, generating nearly $14 billion in profits so far in 2024. The company earns revenue by investing the dollars backing USDT into highly liquid assets like US Treasury bills, prioritizing liquidity and security over yield for users.
Also read: Circle launches global stablecoin network for remittances and payments
Also read: Stablecoin issuer Circle files for IPO
Why it is important
The resilience of Tether highlights a “winner-takes-most” dynamic within the stablecoin market, where liquidity and perceived stability outweigh concerns about potential yield. As Nansen notes, users appear willing to forego direct earnings in exchange for access to the most liquid and stable digital dollars available.
Circle’s USDC has benefited from a regulatory tailwind following Donald Trump’s election victory in November, which created a more favourable environment for crypto innovation in the United States. Institutions seeking regulatory clarity have found USDC particularly attractive, allowing it to recover ground rapidly.
However, competition is heating up. Traditional finance giants like Fidelity, PayPal, and Stripe are moving into the stablecoin sector, launching their own products. Newer entrants like Ethena’s USDe, offering an annualised yield of approximately 19%, are also gaining traction through integrations across major exchanges and DeFi protocols, indicating the market may become more fragmented over time.
