As a seasoned crypto investor, I’ve witnessed the ebb and flow of market trends over the years. The rise and fall of various coins and tokens have shaped my investment strategy, and I’ve learned to adapt to changing market conditions.
Despite several high-profile failures and instances of de-pegging in the stablecoin market recently, the demand for these digital assets has remained robust, resulting in an increasing market share compared to fiat currencies. Although the stablecoin market is still largely controlled by a few key players, such as Tether’s USDT, its dominance has been gradually weakening over the last two years.
In fact, Kaiko’s latest data shows a decline in USDT market share.
Tether (USDT) is Slowly Losing Market Share
According to Kaiko’s assessments, USDT’s dominance in the markets of centralized exchanges (CEXs) decreased from 82% in 2024 to 74%.
The rise of stablecoins such as FDUSD, which gained popularity due to Binance‘s zero-fee promotions and the growing preference for regulated alternatives like USDC, may be contributing to this trend partially.
In June, USDC held the highest market share of 12% it has ever had, largely due to the surge in trading activity on Binance, Bybit, and OKX. Moreover, there was growing interest in yield-bearing stablecoins during the second quarter, prompting Paxos and Tether to introduce new options in response to this demand.
USDC Sees Increased Demand
The MiCA regulation’s enactment has significantly increased the desire for compliant stablecoins, making Circle’s USDC a noteworthy frontrunner in this category. As reported by a French blockchain analysis firm, USDC currently stands out among regulated stablecoins.
At present, approximately 88% of the entire stablecoin market volume consists of non-compliant stablecoins. However, this situation may change substantially as a result of Europe‘s Markets in Crypto-Assets Regulation (MiCA), which became effective on June 30. This regulation is anticipated to prompt market makers to prefer compliant stablecoins over their non-compliant counterparts, leading to a shift in market dynamics.
In response, leading crypto exchanges like Binance, Bitstamp, Kraken, and OKX have begun removing non-compliant stablecoins, including Tether’s USDT, for European users. Data from Kaiko indicates that the proportion of compliant stablecoins has been expanding over the past year, signaling a greater demand for more transparent and regulated alternatives. Among these, USD Coin (USDC) has emerged as the dominant player in this developing market landscape.
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2024-07-13 06:52