Over the past year, Circle’s USD Coin has seen its market share drop from 34.88% to 23.05%, while Tether’s USDT has increased in price.
The market dominance of US dollar-pegged stablecoins has undergone some changes over the past year. While most of them are in a downtrend, Tether (USDT) has rebounded to all-time highs, data from CoinGecko shows.
Over the past 12 months, Circle’s USD Coin (USDC) has seen its market share drop from 34.88% to 23.05% at press time. Binance USD (BUSD) market participation fell from 11.68% to 4.18% in the same period, while Dai (DAI) was at 3.66%, down from 4.05% in May 2022 .
Tether’s USDT is bullish. The market dominance of stablecoins now stands at 65.89%, from 47.04% a year ago. Its market capitalization has grown to $83.1 billion, while USDC’s market capitalization has dropped from a peak of $55 billion to just $29 billion.
In a recent interview with Bloomberg, Circle CEO, Jeremy Allaire, blamed the crypto crackdown by US regulators as the cause of the stablecoin’s market cap drop. The current environment in the US seems to favor Tether.
USD Stablecoin by market dominance. Source: CoinGecko.
The US banking crisis led to USDC’s drop in value in March when $3.3 billion worth of reserves got stuck at Silicon Valley Bank, one of only three crypto-friendly banks to be hacked. management closed. Despite Circle’s assurances, the market was quick to react to the news, sending USDC down against the dollar.
With the growing connectivity between the crypto space and traditional finance, stablecoins are becoming more and more popular. A report released recently by the European Systemic Risk Committee highlighted the need for more transparency in the digital asset market, especially stablecoin reserves.
Tether has been heavily criticized for its lack of transparency over the years. Owned by Hong Kong-based iFinex, the crypto firm was fined $18.5 million by the New York Attorney General’s Office in 2021 for allegedly falsely reporting cash reserves to support support for stablecoins.