In the early days of cryptocurrency, tether was introduced as a way to trade against the US dollar while still owning cryptocurrency. At the time of its introduction, it was virtually the only option that you had for stablecoins. However, as the market for stablecoins has grown, tether is beginning to fade in a crowded landscape. The volume of stablecoins has now surpassed $20B, and Tether’s share of the market has dipped below 80% for the first time in the history of its existence.
One of the fastest-rising stablecoins is USDC, which now owns 13% of the market. This is significant progress, considering the dominance that USDT once had over the stablecoin market.
Market growth for stablecoins
An encouraging aspect of the stablecoin market is that more and more investors are flocking to stablecoins to take advantage of the great returns that are being enjoyed in the DeFi corner of cryptocurrency. With stablecoins, investors can partake in investment vehicles that are otherwise not accessible with cryptocurrency. This means that even though USDT is on the downtrend, the demand for stablecoins as a whole is increasing.
Trouble looms for USDT
Still, the current climate is not very encouraging for the long-term prospects of USDT as a stablecoin for the future. USDT has been downgraded by Weiss Crypto Ratings in recent months, citing the fact that USDT does not have robust auditing procedures, which is something that USDC has more than covered. This has led to higher appeal in USDC.
Though tether remains the most well-known stablecoin on the market, USDC is more popular with DeFi investors and those that are entering the cryptocurrency scene for the first time. This leaves a gaping door for USDC to overtake tether with rapid growth and the capabilities that investors are looking for in a stablecoin.
For the time being, tether is safe as ever. However, as the space continues to expand, tether will once again have to make the case for why they are superior to other stablecoins. At the present, they are losing that battle gradually.