The USDT stablecoin continues to expand its dominance of the crypto market. With a new all-time high, Tether stands out from the competition.
The market capitalisation of Tether (USDT) is at a new all-time high, according to data from Coingecko. At just over $83 billion, the stablecoin is conquering the entire crypto market, leaving the competition by the wayside. USDT thus developed against the trend. The market dominance of the stablecoin is currently at 66 percent, compared to 47 percent last year. The question: Is there still any competition at all?
Besides USDC and BUSD, most centrally managed stablecoins have lost relative relevance in recent months. Since last year, Circle's cryptocurrency has fallen from 35 to now 23 percent market dominance. The reason for this: the loss of the dollar price peg in March. The Binance stablecoin fared no differently. BUSD's market participation fell from 12 to just 4 percent in the last 12 months. Together, the two largest USDT competitors thus represent "only" 34 billion US dollars in market capitalisation. This is not really a threat to Tether.
A long way to the top
However, Tether's supposed success is controversial. In early 2021, the New York State Attorney General's Office confronted the company. The motivation: speculation about missing reserves. The initiated proceedings hung over the crypto space like a sword of Damocles. Then the decision, more than a year later: Tether must disclose its cash reserves for the stablecoin USDT. The result: an indictment of the crypto sector. The market capitalisation collapses - in the end, USDT and USDC are still separated by 10 billion US dollars.
But Tether is fighting its way through criticism and a difficult time after the terra crash. As early as October, the reserves backing the USDT stablecoin consist of 100 per cent US government bonds. Barely two quarters later, the company announces a new all-time high: according to an audit report, it holds 2.44 billion US dollars in excess reserves of its tokens in circulation. Tether thus becomes a model company, at least if the CTO has his way.
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. However, trust in the US government and thus the world's reserve currency is dwindling. All the more reason for the stablecoin issuer to focus on its new product: the EUROC. After launching on the Ethereum Blockchain last year, the Euro Stablecoin has recently also been running on Avalanche. Whether USDT, USDC or BUSD: it is impossible to imagine the crypto market without stablecoins. With the three largest, however, a central player must ensure that the value of the coin really remains stable. Things are different with decentralised stablecoins - or at least they should be. Find out what alternatives there are to Tether, Circle and Binance and how they work in BTC-ECHO magazine issue 70.
