The market is still overwhelmingly influenced by the Tether (USDT), with traders and investors preferring it over major competitors. This inclination is due to its status as the largest digital asset tied to the value of the US dollar, with its market cap surging to a new all-time high of $87.48 billion this week.
The narrative for USDC, on the other hand, follows a different trajectory. The Circle-issued stablecoin has failed to gain much momentum in 2023.
Despite facing repeated scrutiny regarding the authenticity, reliability, and certainty of its reserves, USDT still holds the position of being the third-largest digital asset globally, trailing closely behind Bitcoin (BTC) and Ether (ETH).
The cryptocurrency market experienced a downturn and witnessed various high-profile scandals over the past year, but this did not impede the growth of USDT. During this period, its market cap increased by $22 billion. In contrast, its stablecoin rival, USDC, sailed into significant headwinds earlier in the year, with data indicating a reduction of $21 billion in its market cap over the past year.
Following its peak at $55 billion in June 2022, the market capitalization of USDC has steadily decreased and continued its decline in 2023. From January 2023 onwards, USDC has witnessed a drop of approximately 45%. At the time of writing, its market cap stands at $24 billion.
With an initial market cap of roughly $66 billion at the beginning of the year, Tether USDT has consistently gained traction, reaching over $87 billion in current market value. This represented over a 32% YTD surge.
Tether’s record-breaking growth has been partially driven by growing demand in emerging and developing markets. Moreover, Brazil’s revenue service agency recently revealed that USDT accounted for 80% of all cryptocurrency transactions in the country.
The increasing enthusiasm among institutional investors for BTC, fueled by the anticipation of a potential Bitcoin ETF, has significantly contributed to the expansion of Tether.
According to the latest analysis by blockchain intelligence platform Santiment, there has been a notable rise in USDT transactions exceeding $100,000 – which surpassed 40,000 on a weekly basis.
This increase mirrors activity not seen since March and recalls the heightened trading volume observed during Bitcoin’s rise from $21,000 to $29,000 amid the global banking crisis. The indications depict a clear trend toward a resurgence in the crypto market.