Tether (USDT) stablecoin has hit a new all-time-high (ATH) market capitalization of over $83 billion as its market dominance continues.
Tether USDT market cap breaks ATH
The market capitalization of the Tether stablecoin has reached a new record high, surpassing $83 billion, indicating its continued dominance in the market.
This achievement for USDT occurs at a time when other stablecoin issuers are facing challenges due to regulatory issues. Binance CEO Changpeng “CZ” Zhao highlighted this situation, specifically mentioning the Binance USD (BUSD), a stablecoin issued by Paxos.
CZ pointed out that BUSD, a fully regulated stablecoin, was limited by the New York Department of Financial Services (NYDFS) to a market cap of $23 billion. Currently, BUSD has a market cap of $5 billion, while USDT has experienced significant growth. The NYDFS had directed Paxos to halt any new issuance of BUSD in February due to violations of security laws.
While USDT has achieved an all-time high market cap, its competitors like USD Coin (USDC) and BUSD are struggling to maintain their market shares. USDC, the second-largest stablecoin, has a market cap of $28.8 billion, a considerable difference of over $50 billion compared to USDT. It is worth noting that at one point, USDC’s market dominance was approaching that of USDT, reaching an all-time high of $55.8 billion in June 2022.
However, both stablecoins experienced declines in their market caps following the prolonged bear market of 2022. Nevertheless, USDT has managed to regain higher market dominance, while USDC’s market cap has almost halved.
The decline in market share for other stablecoins can largely be attributed to increased regulatory scrutiny by United States regulators and the banking crisis in the country. After the NYDFS imposed a ban on new BUSD issuance due to security violations, BUSD’s market cap plummeted as users started converting their BUSD to other stablecoins.
Similarly, USDC faced a major crisis when the Silicon Valley Bank collapsed, as the stablecoin issuer held approximately $3.3 billion in reserves there. This caused market panic and a temporary detachment from the U.S. dollar.
Although USDC quickly restored its peg the following day, it significantly affected its market cap, leading many users to convert their USDC holdings to other stablecoins out of fear of a complete crash.
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