USDT’s dominance at new all-time high

by cryptheory

April 5, 2025

Reading Time: 2 mins read

Tether (USDT) market cap is at a new all-time high, like Data from Coingecko prove. At just over 83 USD billion, the stablecoin is taking over the entire crypto market, leaving the competition behind in the process. USDT thus developed against the trend. Because: The market dominance of the stablecoin is currently 66 percent, compared to 47 percent in the previous year. The question: Is there any competition at all?

Aside from USDC and BUSD, most centrally managed stablecoins have lost relative relevance in recent months. Since last year, Circle’s cryptocurrency has fallen from 35 percent to 23 percent market dominance. The reason for this: the loss of the dollar price peg in March. The Binance stablecoin fared no differently. BUSD market participation has fallen from 12 percent to just 4 percent over the past 12 months. Together, the two largest USDT competitors represent “only” 34 billion US dollars in market capitalization. This is not really a threat to Tether.

A long way to the top

However, the supposed success of Tether is controversial. In early 2021, New York City Attorneys confronted the company. The motivation: speculation about a lack of reserves. The initiated procedure hung over the crypto space like the sword of Damocles. Then the decision, more than a year later: Tether has to disclose its cash reserves for the stablecoin USDT. The result: An indictment for the crypto sector. Market cap plummets – USDT and USDC end up separated by 10 billion USD.

But Tether struggles through the criticism and a difficult time after the Terra crash. As early as October, the reserves backing the USDT stablecoin are 100 percent US Treasury bonds. Almost two quarters later, the company announced a new all-time high: According to an audit report, it held 2.44 billion USD in excess reserves of its tokens in circulation. Tether is thus becoming a model company, at least when it comes to the CTO.

Circle leaves the USD field to Tether

Meanwhile, the competition is also working on its image. With the second largest US dollar-backed stablecoin, Circle is still very popular. Confidence in the US government and thus in the world reserve currency is dwindling. The stablecoin issuer is all the more focused on the new product: the EUROC. After being launched on the Ethereum blockchain last year, the Euro stablecoin has recently also been running on Avalanche.

Whether USDT, USDC or BUSD: Stablecoins have become indispensable in the crypto market. With the three largest, however, a central player must ensure that the value of the coin really remains stable. This is different with decentralized stablecoins – or at least it should be. You can find out what alternatives there are to Tether, Circle and Binance and how they work in BTC-ECHO Magazine, Issue 70.