Despite Growing Competition, Tether's USDT Remains the Dominant Stablecoin: Report

Despite growing competition from emerging issuers, the stablecoin market remains largely dominated by a few key players.

Tether’s USDt continues to largely dominate the stablecoin market despite growing competition from emerging issuers, according to data from Web3 research firm Nansen.

As of April 25, Tether (USDT) has a roughly 66% market share among stablecoins, compared to around 28% for USDC (USDC), and Ethena’s USDe (USDe) has just over 2%, according to the April 25 report.

While USDC has clocked faster growth rates, Nansen expects Tether’s lead to endure.

“With nearly 3x as many users as Uniswap and 50+% more transactions than the next app, Tether is by and far the largest use case of onchain activity,” Nansen said.

“Despite the potential dispersion in stables, we inevitably believe this is a ‘winner-takes-most’ market dynamic.”

Tether is also the most profitable stablecoin issuer, clocking nearly $14 billion in 2024 profits. The company earns revenue by accepting US dollars to mint USDT and subsequently invests those dollars into highly liquid, yield-bearing instruments such as US Treasury bills.

“Given the growth of USDT and USDC, the users are clearly expressing that they do not necessarily care about the yield as they are forgoing it to Tether and Circle -they simply want access to the most liquid and ‘stable’/ least-likely-to-depeg stablecoin out there,” Nansen said.

Competitive landscape

Adoption of USDC has accelerated since November, when US President Donald Trump’s election victory ushered in a more favorable US regulatory environment for crypto, Nansen said.

Circle’s US-regulated stablecoin has been “particularly attractive to institutions requiring regulatory clarity,” the report said.

But USDC now faces “intensifying competition as major traditional financial institutions (i.e., Fidelity, PayPal, and banks) enter the market,” Nansen said, adding that stablecoins, including PayPal’s PYUSD and Ripple USD, are “rapidly gaining traction.”

On April 25, payment processor Stripe tipped plans to create a new stablecoin product of its own after buying stablecoin platform Bridge last year.

Despite its smaller market share, Ethena's yield-bearing USDe stablecoin remains “competitive on most fronts moving forward,” partly because of integrations across centralized exchanges (CEXs) and decentralized finance (DeFi) protocols, the report said.

Since launching in 2024, Ethena’s stablecoin has generated an average annualized yield of approximately 19%, according to Ethena’s website.