The first week of December 2023 marks an important milestone as Tether (USDT) reaches a new all-time high in market capitalization, surpassing the $90 billion mark. Meanwhile, its competitors in the stablecoin market have been consistently experiencing a decrease in market capitalization.
However, this significant achievement solidifies Tether’s position as a dominant force in the stablecoin market, capturing a 70% market share. It also demonstrates the broader acceptance and widespread use of stablecoins within the digital economy.
Tether’s dominance is further underscored by its trading volume, which is nine times higher than that of USDC, a competing stablecoin. This disparity highlights the preferences of traders outside the United States and the United Kingdom. USDC is primarily used for value preservation or conversion in companies headquartered in the United States.
Additionally, Tether’s dominance seems to be gaining traction among other major stablecoins. The recent increase in market capitalization sets Tether apart from the second-largest stablecoin, USDC.
As of July 2023, Tether’s market capitalization had seen a 36% increase. In contrast, USDC witnessed a sharp decline in market capitalization, falling below its July 2023 market capitalization of $27 billion, marking the lowest point in five months.
The order among the top-ranking stablecoins in the market has also been disrupted, as DAI and TrueUSD have surged ahead of BUSD (a stablecoin that previously held the third position). BUSD has gradually been phased out as both Paxos, the issuer, and Binance, the exchange, have announced their departure from this stablecoin.
Tether’s increasing influence is also evident on the Tron platform. Justin Sun, the founder of Tron, has stated that “34,500,061 Tron users, accounting for 17.2% of our total user base, are currently holding USDT.” This not only marks a significant milestone for Tron but also underscores the growing use of USDT and other stablecoins in the market.
TRON (TRX) is currently the 12th largest cryptocurrency project by market capitalization. It is one of over 40 projects currently utilizing popular stablecoins within their ecosystems.
The rise of stablecoins is not limited to Tether. In a pioneering move, Société Générale, France’s third-largest bank, has introduced its own stablecoin, EUR CoinVertible, on the Bitstamp exchange. This move by Société Générale marks the first time a major bank has provided digital tokens tracking the value of major currencies to a wide range of investors. It could also pave the way for other traditional financial institutions to follow suit, potentially leading to a more diverse stablecoin market.
Currently, the market capitalization of stablecoins is valued at $130 billion, with the majority dominated by Tether and Circle—both of which have faced questions regarding the audit of their reserve holdings.
In summary, Tether’s recent surge in market capitalization to $90 billion, Société Générale’s introduction of EUR CoinVertible stablecoin, and the increasing adoption of stablecoins on platforms like TRON all signal an undeniable shift in the stablecoin landscape within the digital economy. As more traditional organizations and retail users hold stablecoins, the stablecoin market, currently dominated by Tether, may become more diverse and robust in the near future.