- USDT’s market dominance declined considerably from final bull market.
- The rise of Binance-backed FDUSD impacted USDT’s market.
World’s largest stablecoin Tether [USDT] achieved a historic feat final week after it hit $100 billion in market cap for the primary time ever. With this, it turned the third cryptocurrency to enter the unique membership, with Bitcoin [BTC] and Ethereum [ETH] being the opposite members.
USDT grows within the bull market
In response to AMBCrypto’s evaluation of Glassnode’s knowledge, USDT’s market cap was 22% increased than on the peak of 2021’s bull market. The growing market cap of the business’s bellwether implied sturdy capital inflows into the market, and subsequently a transparent bullish sentiment.
However whereas the market cap has clearly exceeded 2021 peaks, the identical couldn’t be stated for USDT’s buying and selling volumes.
Buying and selling volumes nonetheless lag 2021 peaks
In response to crypto market knowledge supplier Kaiko, USDT’s weekly volumes on centralized exchanges regardless of being akin to ranges hit over the last bull market, remained a lot decrease than the height $660 billion recorded in Could 2021.
Furthermore, USDT’s market dominance declined considerably from final bull market. Throughout 2020-21, it accounted for over 95% of the entire stablecoin buying and selling quantity, which shrank to 71% in March 2024.
As evident from the graph under, a lot of the market share was scooped up by Binance-backed First Digital USD [FDUSD].
Launched in July final 12 months, FDUSD has been aggressively promoted by Binance via its zero-fee buying and selling applications.
The influence has been such that it was the second most-traded stablecoin in 2024 with a market share of greater than 21%. It was additionally the fourth-largest when it comes to market cap as of this writing.
Good or dangerous?
A technique of this was that FDUSD’s rise helped appropriate the imbalance within the stablecoin market to a sure diploma.
As issues stand, USDT nonetheless has a dominant share of the market however the shrinking pie mirrored the emergence of different gamers within the panorama.