• 26 May, 2024

Tether’s USDT Maintains Strong Lead in Global Stablecoin Market

Tether, represented by its token USDT, continues to dominate the stablecoin sector, holding a significant 70.04% of the market share. As a fiat-backed stablecoin, its reserves are predominantly USDT in the form of cash or equivalents. USDC follows with a 21.36% market share, while DAI has a smaller presence at 3.28%.

Source: Into the Block

Stablecoins now account for 8.42% of the total cryptocurrency market capitalization, equating to about $156 billion, according to data from Into the Block. The peak of the stablecoin market cap was reached in April 2022, hitting an all-time high of $188 billion.

Source: Into the Block

Visa has introduced a stablecoin dashboard, reflecting Tether’s dominance with an outstanding supply at record highs. Noel Acheson, in her Cryptos Macro Now newsletter, highlighted that despite USDT’s high market cap, USDC surpasses it in transaction volume. 

According to Acheson, this suggests that USDT is used primarily outside the United States as a dollar-based store of value. This is in contrast with USDC, which serves as a currency for transactions within the nation, the analyst added.

Meanwhile, exchange data underscores an increasing preference for holding USDT. This month, the 7-day moving average of USDT held by exchanges reached $568 million, the highest in a year, with the moving average staying positive since the beginning of February. This indicates either an influx of USDT on exchanges or a hesitance to withdraw amidst market uncertainties.

Source: Into the Block

Amid these dynamics, Ripple has adjusted its on-demand liquidity services for U.S. customers, shifting from XRP to USDT as indicated in a recent ruling. As a result, Ripple now facilitates transactions using USDT as a bridge currency for U.S. clients. This switch facilitates ongoing sales of XRP to on-demand liquidity (ODL) clients through entities outside the U.S.

Venezuela’s state oil company, PDVSA, has also transitioned to using Tether’s USDT for its fuel exports, further adding to the stablecoin’s use case. This move follows the re-imposition of U.S. sanctions due to concerns over electoral reforms, as reported by Reuters.

These incidents collectively portray the increasing utility and reliance on Tether’s USDT in various global and regulatory contexts, reinforcing its status as a pivotal element in the crypto ecosystem. According to Coingecko data, the stablecoin boasts a 24-hour trading volume of over $31 billion and a market cap of over $110 billion at the time of writing.

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