Tether Market Share Slides as Circle’s USDC Makes Big Gains

Tether has dominated stablecoin markets for the past three years as the treasury has kept churning them out with a record level of almost 27 billion in USDT circulating now.

The latest figures from CoinMetrics, however, indicate that its market share has dropped below 75% for the first time ever. More stablecoin options are good for the industry in general as reliance on one centralized provider for dollar-pegged assets is never a good idea.

$USDT market dominance in stablecoins is below 75% for the first time ever

On the other hand, $USDC market dominance has grown to its highest ever level of ~15%https://t.co/ovrTyyEpuf pic.twitter.com/a4v6fNRTch

— CoinMetrics.io (@coinmetrics) January 31, 2021

USDC Growing Faster

The main rival to Tether is another centralized stablecoin, USDC, from Circle. CoinMetrics reports that its market share has climbed to its highest level of around 15%. According to stats from the company itself, there are 5.1 billion USDC in circulation though Coingecko reports it a little higher at 5.9 billion.

The integration of CirclePay, and its stablecoin, into Blockfolio’s new trading app will also help to boost the adoption of USDC. The firm claims that USDC is issued by regulated financial institutions, and backed by fully reserved assets.

Tether, on the other hand, is still under investigation over its audits and could come under pressure should the new ‘Stable Act’ be passed by U.S. lawmakers. The bill is passed would require stablecoin issuers to obtain a chartered banking license, submit to audits by the Federal Reserve, obtain insurance and possibly store assets at the FED.

Since the same time last year, the USDT market capitalization or supply, has increased by 520% and is currently 26.77 billion according to the Tether transparency report. Circle’s stablecoin on the other hand has surged by 1,225% in terms of supply over the past twelve months.

USDC is likely to continue eating into Tether’s market share into 2021 as its usage in DeFi grows.

Other Tether Rivals

Dai is the third-largest stablecoin after the two above and it has the advantage of being fully decentralized and backed by crypto collateral on MakerDAO.

Dai has also seen explosive growth in terms of circulating supply over the past year. There are now a record 1.6 billion Dai circulating and it has grown by 1,400% over the past year.

Binance’s BUSD dollar-pegged asset is the fourth largest with a market capitalization of around 1.4 billion according to Coingecko. It was launched in September 2019 and its growth rate since April 2020 has been around 600%.

There are a few smaller cap stablecoins such as Paxos, TrueUSD, and GUSD but the market is still dominated by the top three.