The stablecoin market remains largely dominated by Tether
Despite USDC’s growth and increasing competition from traditional financial institutions, Tether’s lead in the stablecoin market is expected to endure.
Tether (USDT) continues to lead the stablecoin market with a 66% market share, while USDC follows at 28%, according to Nansen’s 25 April report. Ethena’s USDe stablecoin ranks a distant third with just over 2%.
Although USDC has grown faster, Tether’s dominance is expected to persist due to its large user base and the market’s ‘winner-takes-most’ nature. Tether remains the most profitable stablecoin issuer, with profits of nearly $14 billion expected in 2024.
USDC’s growth has accelerated since November, thanks to a more favourable regulatory environment. It is particularly appealing to institutions seeking regulatory clarity. However, traditional financial institutions, such as PayPal and Fidelity, are increasing competition with their stablecoins.
Ethena’s USDe stablecoin remains competitive, offering yield-bearing features with a 19% annualised yield. It has been integrated into both CEXs and DeFi protocols, positioning it for future growth.
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