Kaiko Analytics, a market intelligence platform, has revealed in a new report that Tether’s (USDT) stablecoin dominance is being challenged by new competitors. The report, titled “Tether Loses Market Share,” states that Tether’s market share over centralized exchange platforms (CEXs) has decreased by 13% year-to-date (YTD) due to the increasing popularity of rival dollar-pegged digital assets like FDUSD and USDC.
According to Kaiko Analytics, the decline in Tether’s market share on CEXs can be attributed to the growing competition from stablecoins such as FDUSD, which benefits from Binance’s zero-fee promotions. USDC, a regulated alternative, has also experienced a rise in its market share, indicating a preference for regulated stablecoins. Currently, stablecoins issued in the US account for 10% of the overall stablecoin trade volume.
Kaiko also highlighted other competitors like Ethena (USDe), which stands out by offering yield, as potential factors contributing to Tether’s declining market dominance. Ethena’s USDe has witnessed significant growth in volume since its launch in February, although it has decreased from its peak in April of over $800 million following the ENA airdrop by Ethena.
Despite these challenges, Tether has reported impressive financial performance. Their 2024 Attestation Report states that they achieved a record-breaking $4.52 billion in profits during the first quarter of this year. Nonetheless, the emergence of new competitors and the growing preference for regulated alternatives suggests that Tether’s dominance in the stablecoin market may be facing significant competition.