Tether’s market cap for stablecoins has doubled that of USDC after the recent controversy surrounding Silicon Valley Bank’s involvement with the stablecoin. As investors looked for alternative options, Tether’s value surged, increasing its market share significantly. The growth in Tether’s market cap comes as stablecoins continue to gain mainstream acceptance as a vehicle for digital asset transactions.
Stablecoin Market Cap Swells to $75 Billion, USDT Dominates with 58.1%
According to data from CoinGecko, Tether’s stablecoin market capitalization has reached nearly $75 billion, its highest level since May 2022. This makes USDT’s market cap almost twice as much as that of USD Coin (USDC), which is the world’s second-largest stablecoin issued by Circle. Stablecoins have become a crucial feature of the digital asset economy, ballooning in value over the past few years. In March 2020, USDC’s market cap was roughly $564 million; today, that figure has skyrocketed to $37.7 billion.
While USDC’s woes seem to be resolved, the aftermath of the Silicon Valley Bank (SVB) bank run shows that investors have been increasingly opting for USDT. According to Glassnode, USDT’s dominance has surged to 58.1%, the highest level since mid-September 2021, while USDC’s dominance has fallen to slightly over 30%, a significant drop from nearly 38% last summer. This happened when Circle’s stablecoin sought to capitalize on USDT’s troubles amid the Terra meltdown.
Another contributing factor to USDT’s growing dominance is the sharp decline in Binance’s BUSD stablecoin supply due to regulatory crackdowns. As a result, Paxos, the issuer of the stablecoin, halted the minting of the BUSD token. CoinGecko data shows that BUSD’s market fell from $16 billion on February 13 to just $8.3 billion as of today.
In conclusion, stablecoins have become an essential part of the digital asset economy. Despite regulatory scrutiny, their popularity continues to grow, and USDT has emerged as the dominant player in the market with a market cap of $75 billion. Investors will be watching this space closely to see how stablecoins evolve and continue to shape the crypto landscape.