Source: Cointelegraph
Original: “Nansen: Despite Intense Competition, Tether's USDT Remains Dominant in the Stablecoin Market”
Despite the increasing competition from emerging issuers, the stablecoin market is still primarily dominated by a few major players. According to data from Web3 research firm Nansen, Tether's USDT continues to lead among dollar-pegged stablecoins, even as competition intensifies.
As of April 25, Tether's USDT market share is approximately 66%, while USDC's market share is around 28%. Ethena's USDe stablecoin ranks third, with a market share just above 2%.
Nansen expects that, despite the faster growth of competitors like USDC, Tether's leading position will persist.
Nansen stated, "The number of Tether users is nearly three times that of Uniswap, and its trading volume exceeds the latter by more than 50%. Tether is undoubtedly the largest use case in on-chain activity."
Researchers added, "While stablecoins may experience decentralization, we inevitably believe this is a 'winner-takes-all' market dynamic."
Tether is also the most profitable stablecoin issuer, with profits nearing $14 billion in 2024. The company generates income by accepting dollars to mint USDT and subsequently investing those dollars in highly liquid and yield-generating instruments, such as U.S. Treasury bonds.
Nansen noted, "Given the growth of USDT and USDC, users clearly indicate that they do not necessarily care about yields, as they entrust their funds to Tether and Circle—they simply want the most liquid and 'stable' stablecoin that is least likely to de-peg."
Since last November, the adoption of USDC has accelerated, coinciding with the election victory of U.S. President Donald Trump, which created a more favorable regulatory environment for cryptocurrencies.
The report pointed out that Circle's U.S. regulatory stablecoin is "particularly attractive" to institutions that require regulatory clarity.
However, USDC now faces "intensified competition" as major traditional financial institutions (such as Fidelity, PayPal, and banks) enter the market. Stablecoins, including PayPal's PYUSD and Ripple USD, are "quickly gaining attention."
On April 25, payment processing company Stripe revealed plans to launch its own new stablecoin product following the acquisition of the stablecoin platform Bridge.
Despite its smaller market share, Ethena's yield-bearing USDe stablecoin remains "competitive in most aspects" for the future, partly due to its integration with centralized exchanges (CEX) and decentralized finance (DeFi) protocols.
According to Ethena's website, since its launch in 2024, Ethena's stablecoin has an average annualized yield of approximately 19%.
Related: MetaMask Partners with Mastercard to Launch Self-Custody Crypto Payment Card
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