Crypto Market Update. USDT Takes the Lead in the Stablecoin Race
Tether's USDT stablecoin has reached its highest market share among stablecoins in 15 months, surpassing 54% on Monday, according to data from CoinGecko. Despite the market shakeup, Tether's position as the dominant stablecoin is strengthening
The rise in USDT's market share came mostly at the expense of Binance USD, which has declined rapidly since Paxos, its issuer, announced on Feb. 13 that it would stop minting new BUSD tokens due to regulatory pressure. BUSD's market capitalization has dropped from $16 billion to below $9 billion as a result.
USDT's market capitalization has grown by $5.3 billion this year to $71.6 billion, with $3 billion of that increase occurring after mid-February. Circle's rival stablecoin, USD coin (USDC), has also gained $3 billion since the Paxos announcement, but its market cap of $44 billion is still lower than at the start of 2023.
Stablecoins have become essential to the crypto economy, reaching a peak market capitalization of $188 billion in May 2022. They peg their price stable to an external asset, such as the U.S. dollar, and facilitate trading on exchanges and transactions between central bank-issued fiat money and the digital asset world.
Tether's status as the leading stablecoin issuer is notable due to the fact that the company has previously provided limited transparency regarding the reserves backing the value of USDT and has been subject to intense scrutiny regarding its internal operations. Last week, the Wall Street Journal reported that Tether used bank accounts accessed by falsified documents in 2018. In September, a New York judge ordered Tether to present financial records on USDT's reserve assets in a lawsuit that alleges Tether conspired to issue USDT to prop up the price of bitcoin (BTC).
USDT is currently the most traded cryptocurrency, with trading volume of $27 billion in the past 24 hours, larger than BTC.
