- Tether USDT market share drops from 82% to 74%
- Regulated stablecoins like USDC gain market share by depicting changing market preferences.
With the rise of crypto adoption and widespread use globally, stablecoins have emerged as a favorite among investors and a store of value for many crypto users.
Over the past few years, Tether has been the dominant crypto in a highly concentrated stablecoin market. Despite the dominance, market sentiment is shifting and Tether’s dominance is slowly fading.
As of this writing, Tether’s USDT trading volume is down 8.8% in 24 hours to $38.65 billion.
Tether USDT market share falls
According to Kaiko’s report, Tether’s market share is steadily declining. It was also revealed that USDT’s market share on centralized exchanges fell from 82% to 74% in 2024.
The decline comes from an upward shift in market sentiment and adjustment to stable currencies. Over the past year, other stablecoins, such as FDUSD, have taken the market by storm, especially since partnering with Binance.
These factors have put Tether’s market dominance to the test.
Increased competition
As reported by AMBCrypto, the trading volume of USDC increased to $23 billion in 2024 from $9 billion in 2023. The growth of USDC comes from increased demand for compatible stablecoins.
Large investors, especially institutional ones, are slowly moving towards legally accepted stablecoins to ensure that they comply with operational requirements, especially in the European Union.
Source: Kaiko
As reported by Kaiko, USDC’s market share has grown to 12%, approaching FDUSD’s 14%.
With the highest trading on major crypto exchange platforms such as OKX, Binance and Bybit, USDC has become a serious competitor to Tether. Additionally, MICA’s adoption of CIRCLE has significantly increased USDC’s market share and trading volume.
Also, as the key trade splits in X, USDC is surpassing Tether in terms of flexibility and accessibility. He noted that,
“The supply of USDC is more elastic than Tethers. It offers zero fees and is more accessible, as dealing with Tethers involves long transfer times to smaller banks in the Virgin Islands.”
EU Stablecoin Regulation
In particular, Europe’s Markets in Crypto Assets (MICA) Regulation is set to challenge the continued dominance of non-compliant stablecoins.
With MICA’s requirements in place, exchange platforms like Kraken may be pushed to reconsider their stance on stablecoins like Tether. These regulations have worried major players about their operations in the EU, even for approved stablecoins.
For example, Tether’s CEO argued that these requirements could result in complications between stablecoin issuers.
Overall, MICA has set a precedent that will challenge existing crypto operations in the European Union.
Source: Kaiko
Tether expects suspension of USDT redemptions
According to official reports. Tether is expected to suspend USDT settlements across major blockchains until September 2025.
Source: X
Francesco noted this development on X (formerly Twitter), sharing that,
“Tether has announced that it will stop producing USDT on EOS and Algorand as of today. However, USDT settlements on these blockchains will continue for the next 12 months.”
This follows the 2023 suspension of Tether USDT on other blockchains such as Bitcoin, Kusama and Bitcoin Cash. For the next 12 months, Tether will suspend operations within multiples with the aim of using effective networks for better user experience and overall stability for the stablecoin.