Bitrabo Editorial
New data reveals that Tether (USDT) has experienced a growth in dominance, while USD Coin (USDC) and other stablecoins have lost market share.
USDT Dominance Now at 67.6%
According to on-chain analytics firm Glassnode, the relative supply dominance of USDT has been increasing. Supply dominance refers to the percentage of the total supply of the largest stablecoins contributed by a specific stablecoin. The stablecoins included in this analysis are Tether (USDT), USD Coin (USDC), Binance USD (BUSD), Dai (DAI), and TrueUSD (TUSD). These stablecoins are all pegged to the US dollar, allowing for a direct comparison of their supplies and market caps.
An increase in the supply dominance of a stablecoin indicates that its supply is contributing a larger share to the combined supply of stablecoins. This trend suggests a growing preference for that particular token in the market. On the other hand, a decreasing supply dominance implies that a stablecoin is losing market share to other leading assets.
The chart below shows the trend in the individual dominance of each stablecoin over the past few years:
The metric value has been increasing recently. Source: Glassnode on Twitter
As shown in the graph, USDT has consistently been the largest stablecoin in the market. However, its dominance had been decreasing in 2021 and 2022, narrowing the gap between USDT and USDC, the second-largest stablecoin. The decline in USDC’s dominance can be attributed to the FUD (fear, uncertainty, and doubt) surrounding the rumors of USD Coin losing its backing. This uncertainty led to some investors panic-redeeming their USDC, temporarily impacting its peg to the US dollar.
Binance USD (BUSD), another stablecoin, had also shown growth in dominance but has recently lost market share due to a decrease in token minting. As investors gradually redeem BUSD, its dominance has shrunk to just 3.8%. With BUSD’s decline and USDC’s drop to 23% dominance, USDT has taken the opportunity to gain market share, reaching a dominance of 67.6%, the highest since May 2021.
Bitcoin Price
As of now, Bitcoin is trading around $26,000, experiencing a 2% decline in the past week.
BTC has mostly been moving sideways recently. Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Glassnode.com