Stablecoin Market Faces Capital Drain as USDT Expands its Reach

USDT’s Dominance Among Stablecoins Reaches 70%

In recent weeks, the stablecoin sector has experienced net outflows, with capital constantly leaving the market. However, Tether (USDT) has defied this trend and continued to expand its dominance. According to a report by on-chain analytics firm Glassnode, USDT’s market share among stablecoins has now grown to nearly 70%.

Glassnode analyzed the capital flows into and out of the cryptocurrency market, focusing on the valuations of Bitcoin (BTC), Ethereum (ETH), and stablecoins. The data revealed that stablecoin netflows have been negative since April 2022, indicating a constant outflow of capital. Initially, Bitcoin and Ethereum also experienced outflows, but in 2023, the tides turned, and they started seeing inflows.

However, recent data suggests that capital is once again exiting the cryptocurrency sector as a whole, with Bitcoin and Ethereum approaching neutral or negative netflows. This indicates a lack of interest in investing in the sector at the moment.

During this period, stablecoins have witnessed an exit of $43 billion, representing a significant decline of 26%. The aggregate stablecoin market cap has fallen to just $120 billion.

The report suggests that this decline can be attributed to both bear market conditions and the opportunity cost of higher interest rates, which are not passed onto non-yielding stablecoins.

While the stablecoin sector as a whole has been bleeding, a closer look at the major stablecoins reveals that the decline has not been consistent across all assets. Tether (USDT) experienced a sharp decline between April 2022 and the FTX crash, while USD Coin (USDC) saw a more gradual plunge. Binance USD (BUSD) did not decline at all during this period.

However, since the FTX low, USDT has turned the tide and witnessed a rise of $13.3 billion in its supply. On the other hand, USDC and BUSD have both seen significant declines of $16.7 billion and $20.4 billion, respectively.

As a result of these opposite flows, Tether’s market share among stablecoins has dramatically risen from a low of 44% in June to the current 69% mark.

In terms of Bitcoin’s price, the asset initially dropped to around $25,000 but has since experienced a quick turnaround, recovering above $26,000.

It is important to note that the data and analysis mentioned in this report are from Glassnode and not affiliated with

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J-S Tremblay
About the author - J-S Tremblay

I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...

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