Tether’s USDT stablecoin has achieved a new peak in market capitalization, according to CoinGecko data, surpassing the previous record of $83.355 billion in May 2022. With a current valuation of $83.6 billion, USDT is the third-largest cryptocurrency by market capitalization, representing 7.5% of the total crypto market cap. Notably, USDT dominates the stablecoin market, accounting for 64% of the total stablecoin market cap ($130.2 billion).
A Tether spokesperson told Decrypt that users are transitioning from less secure and liquid stablecoins to Tether USDT, as a result of the banking crisis in the US. They added that, despite the crypto winter, there is an increasing number of users who are choosing to hold their positions on the sidelines and wait for an opportunity to re-enter the market.
Circle’s USDC has been particularly affected this year, after revealing that $3.3 billion were stuck with the Silicon Valley Bank, causing it to briefly lose its peg for a few days. CoinMetrics data shows a sharp decline in USDC’s supply since March, with its market capitalization falling from over $40 billion to $28.8 billion.
Tether Limited has issued the USDT token on 13 blockchains, such as Ethereum, Tron, Solana, Avalanche, and Omni chain. According to CoinMetrics data, the lion’s share of the spike in USDT’s supply came from Tron, reaching $46.1 billion in May, with an increase of $1 billion and $9 billion since the start of 2023. On the other hand, USDT on Ethereum has risen modestly from $32.3 billion to $36.3 billion.
Analysts suggest that market makers on centralized exchanges like Binane and OKX prefer Tron over Ethereum due to cheaper and faster transactions. Additionally, the Tether spokesperson noted that Tron is also popular in emerging markets and developing countries for similar reasons.
Currently, Tether’s supply represents 0.4% of the total US dollar’s M2 money supply, which is the total amount of a currency’s fiat value in the market.
