The new data shows that the dominance of Tether in the stablecoin market plunged below 80% in recent years. Tether has remained at the top for many years, but now, other stablecoins have also started growing.
In the stablecoin market, Tether’s dominance continued for a long time even from the existence of stablecoins. The data from Coinmetrics unveils that Tether’s dominance has dropped below 80%.
There are many reasons behind the dominance and popularity of the USDT coin. First, it is pegged to the USD dollar and serves as a perfect bridge between crypto and fiat. It is very popular in the regions or countries which have banned buying or selling of cryptocurrency and USDT is then employed to buy and sell cryptocurrency instead of fiat money. For example, in China investors use USDT to invest in Bitcoin.
Coinmetrics’s data shows that USDT remained very popular from the end of 2018 to the start of 2019, but then, its dominance started to decrease after the company launched ERC20-based USDT on the Ethereum blockchain. USDT was first issued on Omni Layer, but later, ERC20 and TRC20 versions of USDT were issued on Ethereum and Tron blockchains respectively. ERC2-based USDT took a leading position in transactions.
So, transactions of Tether started reducing as compared to ERC20 USDT. Tether’s supply also suffered a lot. Ethereum-based transactions had surpassed that of Omni. Another important incident happened earlier this month when 1 billion USDT tokens were transferred from the Tron blockchain to the Ethereum blockchain.
Market Cap in 2020
In 2020, the market cap of Tether has reached to $15 billion after surging by 4x. At the start of the year, the market cap was hovering at $4 billion, but now, it is standing at $15 billion. Tether celebrated by saying:
“Tether has just surpassed a $15 billion market capitalization!In only one month, Tether’s market cap has increased by more than $3 billion, maintaining its number one spot as the most liquid, stable and trusted currency!”