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Tether follows BTC, ETH’s footsteps – How do you think it will turn out?

2min Read

USDT’s dominance comes into question as other players emerge.

USDT trading volume trails market cap

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  • USDT’s market dominance declined significantly from last bull market.
  • The rise of Binance-backed FDUSD impacted USDT’s market.

World’s largest stablecoin Tether [USDT] achieved a historic feat last week after it hit $100 billion in market cap for the first time ever. With this, it became the third cryptocurrency to enter the exclusive club, with Bitcoin [BTC] and Ethereum [ETH] being the other members.

USDT grows in the bull market

According to AMBCrypto’s analysis of Glassnode’s data, USDT’s market cap was 22% higher than at the peak of 2021’s bull market. The increasing market cap of the industry’s bellwether implied strong capital inflows into the market, and therefore a clear bullish sentiment.

USDT's market cap

Source: Glassnode

But while the market cap has clearly exceeded 2021 peaks, the same couldn’t be said for USDT’s trading volumes.

Trading volumes still lag 2021 peaks

According to crypto market data provider Kaiko, USDT’s weekly volumes on centralized exchanges despite being comparable to levels hit during the last bull market, remained much lower than the peak $660 billion recorded in May 2021.

USDT weekly trade volume

Source: Kaiko

Moreover, USDT’s market dominance declined significantly from last bull market. During 2020-21, it accounted for over 95% of the total stablecoin trading volume, which shrank to 71% in March 2024.

As evident from the graph below, much of the market share was scooped up by Binance-backed First Digital USD [FDUSD].

USDT market share

Source: Kaiko

Launched in July last year, FDUSD has been aggressively promoted by Binance through its zero-fee trading programs.

The impact has been such that it was the second most-traded stablecoin in 2024 with a market share of more than 21%. It was also the fourth-largest in terms of market cap as of this writing.

Good or bad?

One way of looking at this was that FDUSD’s rise helped correct the imbalance in the stablecoin market to a certain degree.

As things stand, USDT still has a dominant share of the market but the shrinking pie reflected the emergence of other players in the landscape.


Aniket Verma works as a journalist at AMBCrypto. Contrary to most who are primarily interested in merely tracking price movements of cryptos, his focus is on examining the niche intersection between cryptocurrencies and traditional finance. A so-so Bitcoin maximalist, Aniket has a strong disdain for memecoins and the unfounded frenzy they seem to generate every market season. Coming from a strong engineering background, Aniket previously worked as a Content Manager for TV9 Network. Before his stint over there, he was an Associate Multimedia News Producer at Reuters.
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