Nansen: Despite fierce competition, Tether's USDT still dominates the stablecoin market.

Source: Cointelegraph Original text: "Nansen: Despite fierce competition, Tether's USDT still dominates the stablecoin market"

Despite the increasing competition among emerging issuers, the stablecoin market is still primarily dominated by a few major players. According to data from Web3 research firm Nansen, Tether's USDT continues to lead among dollar-pegged stablecoins, even as competition intensifies.

As of April 25, Tether's USDT market share is approximately 66%, while USDC's market share is around 28%. Ethena's USDe stablecoin ranks third, with a market share just over 2%.

Nansen expects that, despite the faster growth of competitors like USDC, Tether's leading position will still be maintained.

Nansen stated: "The number of users of Tether is nearly three times that of Uniswap, with trading volume exceeding the latter by more than 50%. Tether is undoubtedly the largest use case in on-chain activity."

Researchers added, "Although stablecoins may experience fragmentation, we inevitably believe this is a 'winner-takes-all' market dynamic."

Tether is also the most profitable stablecoin issuer, with a profit of nearly $14 billion in 2024. The company earns income by accepting U.S. dollars to mint USDT and subsequently investing those U.S. dollars in highly liquid and yielding instruments, such as U.S. Treasuries.

Nansen said: "Given the growth of USDT and USDC, users clearly indicate that they do not necessarily care about yields, as they are entrusting it to Tether and Circle—they just want the most liquid and 'stable' stablecoin that is least likely to decouple."

Since November last year, the adoption of USDC has accelerated, coinciding with the election victory of U.S. President Donald Trump, creating a more favorable regulatory environment for cryptocurrencies.

The report pointed out that Circle's US-regulated stablecoin is "particularly attractive" to institutions that require regulatory clarity.

However, USDC is now facing "intensified competition" as major traditional financial institutions such as Fidelity, PayPal, and banks enter the market. Stablecoins including PayPal's PYUSD and Ripple USD are "quickly gaining attention."

On April 25, payment processing company Stripe revealed plans to launch its own new stablecoin product after acquiring the stablecoin platform Bridge.

Despite having a small market share, Ethena's yield-generating USDe stablecoin remains "competitive in most respects" in the future, partly due to its integration with centralized exchanges (CEX) and decentralized finance (DeFi) protocols.

According to Ethena's website, since its launch in 2024, Ethena's stablecoin has had an average annualized yield of approximately 19%.

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