Tether (USDT) Dominates the Stablecoin Market, But Circle (USDC) Is Gunning for a Piece of the Pie

Stablecoins are an essential part of the crypto and blockchain ecosystem and Tether has been the leader in this segment.

Stablecoins have become an integral part of the crypto and blockchain ecosystem, and Tether has maintained its leadership in this segment. This dominance is not only evident in terms of stablecoin adoption but also in terms of USDT marketcap.

Tether has been actively minting USDT in response to the robust demand for stablecoins this year. Recent reports have disclosed that the company minted 1 billion USDT on Thursday.

Tether has been on a USDT minting spree since 6 November, adding 21 billion UDT to the market within that short period. At the time of observation, its marketcap had rallied to a new ATH of $139.76 billion.

For perspective, USDT marketcap at the start of 2024 was at $91.72 billion. This means it has so far added a bit over $48 billion to its marketcap just this year alone.

This perfectly encapsulates the liquidity resurgence observed in the market during the year.

The Brewing Battle for Dominance in the Stablecoin Segment

The aggressive USDT marketcap growth is just one of the key growth areas that have so far allowed it to be the most dominant stablecoin. The other key factor is the level of adoption.

To put things into perspective, here’s a DeFiLlama chart demonstrating USDT dominance which was at 69.42% at press time. USDT was the second most dominant stablecoin at 20.62%.

Recently, Circle has been gunning for a bigger piece of the stablecoin marketcap share with USDC. In fact, there were reports earlier in the week highlighting a partnership with Binance aimed at boosting USDC adoption.

The collaboration could pave the way for USDC to pull off a more competitive front and potentially gain more dominance. This was announced just 2 days before Tether’s recent USDT minting.

If Circle’s endeavor proves successful, then USDC could benefit from more adoption and utility. This means more people could start using it and thus boosting its dominance.

This also warrants a look at user or address statistics. USDT had just over 15 million total addresses at the start of May 2021 and slightly below $3 million had a non-zero balance.

Total addresses have since grow to 42.76 million addresses, with over 6.02 million addresses having a non-zero balance.

This is as of 9 December, painting a reasonable picture of just how USDT addresses have grown so far.

Meanwhile, USDC had 4.33 million total addresses as of early May 2021. There were slightly under 888,000 addresses with balance during the same period.

USDT total addresses have since then grown to 15.63 million addresses as of 9 December. There were 2.4 million addresses with balance during the same time.

Based on these figures, it was clear that USDT outperformed USDC in terms of address growth. But the real question is, will Circle’s partnership with Binance narrow this gap?

USDC could reap immense benefits from the deal in terms of user growth and perhaps even in terms of dominance.

However, it has a long way to go before securing a chance at surpassing USDT both in terms of user growth and marketcap.