“`html
In spite of the increasing rivalry from new issuers, the stablecoin sector continues to be primarily controlled by a handful of major entities. As per insights from Web3 analytics company Nansen, Tether’s USDt still holds the top position among US dollar-linked stablecoins, even as the competition strengthens.
As of April 25, Tether (USDT) commands roughly 66% of the stablecoin market, compared to approximately 28% for USDC (USDC), as reported by Nansen on April 25. Ethena’s USDe stablecoin stands in a distant third place, boasting just over 2% market share.
Nansen anticipates that Tether’s dominance will persist even as contenders like USDC experience quicker growth rates.
“With almost three times as many users as Uniswap and over 50% more transactions than the next application, Tether is far and away the largest driver of on-chain activity,” Nansen stated.
“Even with potential diversification in stablecoins, we firmly believe this represents a ‘winner-takes-most’ market situation,” the Web3 analyst added.
Tether is also the highest-earning stablecoin issuer, achieving nearly $14 billion in profits for 2024. The firm generates revenue by accepting US dollars to produce USDT and then investing those funds into highly liquid, yield-generating assets such as US Treasury bills.
“Considering the rise of both USDT and USDC, the users are clearly signaling that they do not necessarily prioritize yield as they choose to forgo it in favor of Tether and Circle – they merely seek access to the most liquid and ‘stable’/ least-likely-to-depeg stablecoin available,” Nansen commented.
Competitive landscape
The uptake of USDC has surged since November, when the election victory of US President Donald Trump brought about a more favorable regulatory atmosphere for cryptocurrency in the US, according to Nansen.
Circle’s US-regulated stablecoin has been “especially appealing to institutions that demand regulatory transparency,” the report noted.
However, USDC now contends with “heightened competition as significant traditional financial entities (like Fidelity, PayPal, and banks) enter the arena,” Nansen remarked, noting that stablecoins, including PayPal’s PYUSD and Ripple USD, are “quickly gaining momentum.”
On April 25, payment processor Stripe revealed intentions to launch a new stablecoin offering of its own following the acquisition of stablecoin platform Bridge last year.
Even with its smaller market presence, Ethena’s yield-generating USDe stablecoin remains “competitive across most aspects moving forward,” partly due to its integrations across centralized exchanges (CEXs) and decentralized finance (DeFi) platforms, the report indicated.
Since its launch in 2024, Ethena’s stablecoin has produced an average annualized yield of around 19%, as detailed on Ethena’s website.
Magazine: Bitcoin payments are being jeopardized by centralized stablecoins
Source link
“`
