The first week of December 2023 marked a major milestone when Tether (USDT) reached a new high in market capitalization. The popular stablecoin reached $90 billion, while its competitors saw drops in their market capitalization.
This achievement positions Tether as a dominant force in the stablecoin market, with a staggering 70% market share. This increase in market capitalization reflects Tether’s growing influence. It also shows the wider acceptance and use of stablecoins in the digital economy.
Tether remains the most popular stablecoin
This dominance is further underlined by trading volumes. As Dragonfly General Partner Rob Hadick noted, “USDT volumes are nine times larger than USDC,” suggesting it indicates “how these tokens simply serve different use cases today.”
This disparity highlights the preference of traders outside of US and UK regulated firms and emerging markets for USDT as a transaction mechanism. In contrast, USDC is primarily used today to hold value or flee to safety for US-based companies.
Additionally, Tether’s dominance appears to be gaining ground among other major stablecoins. The recent rise in market capitalization to a new all-time high clearly indicates a divergence between the second largest stablecoin, USDC.
Market capitalization of stablecoins. Source: IntoTheBlock
As of July 2023, Tether has seen a 36% increase in its market capitalization. However, USDC has seen its market cap fall below its July 2023 market cap of $27 billion, a 5-month low.
Additionally, the formerly third-largest stablecoin in BUSD has lost its appeal following its removal from Binance as a stablecoin. Allowing DAI and TrueUSD to overtake it.
17.2% of TRON users hold USDT, says Justin Sun
Tether’s growing influence is also evident on the Tron platform. Tron founder Justin Sun, commenting on Tron’s growth, highlighted an impressive statistic:
“34,500,061 Tron users, representing 17.2% of all our users, now hold #USDT.”
This not only marks an important milestone for Tron. But it also attests to the increasing use of USDT and other stablecoins in the market.
TRON (TRX) is currently the 12th largest cryptocurrency project by market cap. It is one of more than forty projects currently using the popular stablecoin within their ecosystems.
Stablecoin adoption spreads to banks
The rise of stablecoins is not just limited to Tether. In a pioneering move, France’s third-largest bank, Société Générale, will launch its own stablecoin, the EUR CoinVertible. The stablecoin will be launched on Bitstamp, a Luxembourg-based exchange.
This is the first time a major bank has offered digital tokens that track the price of hard currencies to a wide range of investors. Jean-Marc Stenger, CEO of SocGen Forge, the bank’s digital assets unit, spoke about this company and stated:
“The crypto ecosystem is highly concentrated on a few existing stablecoins, 90 percent denominated in US dollars… we definitely believe there is a place for a bank in this field and there is a place for a euro. [denominated] stablecoin.”
This move by Société Générale may pave the way for other traditional financial institutions to follow suit, which could lead to a more diverse stablecoin market.
The stablecoin market, currently valued at $130 billion, is largely dominated by Tether and the US Circle. Both have faced questions about audits of the reserves backing their tokens.
Total market capitalization of stablecoins. Source: IntoTheBlock
In contrast, SocGen has assured that euros would fully support the EUR CoinVertible, adding another layer of trust and credibility to the stablecoin market.
In conclusion, the recent rise in Tether’s market capitalization to $90 billion, the launch of Société Générale’s EUR CoinVertible, and the growing adoption of stablecoins on platforms like TRON, signal an undeniable shift towards stablecoins in the digital economy.
Therefore, as more traditional institutions and retail users adopt these digital tokens, the stablecoin market, currently dominated by Tether, is likely to become more diverse and robust in the near future.
