Tether’s Shrinking Market Share Could Actually Be Helpful: Report

Tether’s shrinking market share could actually be helpful for the market situation as this was one of the king stablecoins that dominated 90% of the market so let’s read more today in our latest Tether news.

Tether still has the bigger market share of the stablecoins but it is now around 43% and Glassnode reports that the USDT market share is higher at 45% but shows the same downward trend of dominance. According to the Tether transparency report, there are 66 million USDT in circulation which is a figure that has been declining this year and it is down 20% from the peak of 93 billion back in May. More competition in the stablecoin space means that the digital assets are not the same and any potential regulatory action against one will not bring the system down as feared before.

Over the last two years, the dominance of #Tether has been in macro decline.$USDT has fallen from 88.3% of the stablecoin market, to 45.2% today, now less than half of the market.$USDC dominance has grown 4.2x, $BUSD by 7.5x, and $DAI by 3.9x over the same 2y timeframe. pic.twitter.com/g7NqkIKtp8

— glassnode (@glassnode) July 7, 2022

Stablecoins command a bigger share of the market than ever before so their slice of the overall pie surged this year with the prices crashing. The total stablecoin market cap Is set at $154 billion which works out at 15.2% of the trillion-dollar cap for the assets. Tether’s main rival is Circle which saw the supply increasing as the USDT in circulation shrunk. There are now 55.7 billion USDC in circulation giving a market share of 36% and the company claims that every digital dollar of USDC is 100% backed by cash and short-dated US treasuries which Is why users were switching to it.

Tether’s shrinking circulation however proves to be a good thing. Tether released a report assuring users that the reserves were fully backed and that it is reducing the exposure to the paper holdings but the fear of regulation created opportunities for the rivals. The third biggest stablecoin Binance USD has seen the market share surge by 7.5x over the past few years. There are now 17.8 billion BUSD in circulation which give the market share 11.5% and the decentralzied DAI Stablecoin is n fourth place with 6.4 billion circulating with a share of 4.2%.

The demise of the Terra ecosystem spurred other copycats like Tron’s USDD but it is still trading below the peg and never gained traction. The latest crypto platform to unveil this stablecoin is the DEFI lending protocol Aave which posted about its dollar-pegged GHO stablecoin. Like Maker’s DAI, it will be backed by the users’ collateral on the platfotm that will be put up to mint the stablecoins and the new offering enter a crowded stablecoin market that comprises of at least 85 different fiat-pegged tokens.