Tether Stays on Top, But Stablecoin Competition Is Just Getting Started

According to a new report from Web3 analytics firm Nansen, USDT commands about 66% of the dollar-pegged stablecoin market as of late April, leaving competitors like USDC and Ethena’s USDe trailing behind with 28% and just over 2% shares, respectively.

Despite faster growth rates from rivals, Nansen predicts that Tether’s advantage will hold. With significantly more users than top DeFi platforms like Uniswap and a commanding lead in transaction volume, USDT has firmly entrenched itself as the leading stablecoin use case on-chain. Researchers argue that the stablecoin market is shaping up as a “winner-takes-most” environment, favoring first movers.

Tether’s financial strength supports this dominance: in 2024, the company pulled in nearly $14 billion in profits by investing users’ dollar deposits into liquid, yield-bearing assets like U.S. Treasury bills. Interestingly, Nansen points out that users seem less concerned with missing out on yield and more focused on stable access to liquidity — favoring products they view as least likely to depeg.

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Meanwhile, USDC’s adoption has accelerated following the U.S. election results in November, as institutions increasingly prioritize regulatory clarity. Circle’s U.S.-regulated stablecoin has become an appealing option for more compliance-focused investors. Yet, the landscape is shifting fast. Traditional financial giants like PayPal, Fidelity, and Stripe (which recently acquired stablecoin platform Bridge) are preparing their own digital dollar products, threatening to reshape the market yet again.

Amid the scramble, newer players like Ethena are trying a different approach. By offering an average 19% yield since launch, USDe has carved out a niche among investors seeking income over stability. Deep integrations with both centralized exchanges and DeFi platforms have helped boost its visibility.

While Tether holds a commanding lead for now, growing competition suggests that the stablecoin wars are just getting started.

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