Tether (USDT) Loses Ground on Centralized Exchanges, Down to 74% Market Share

Even with several high-profile crashes and decoupling events in recent years, stablecoins have continued to take market share from fiat currencies, reflecting increasingly strong demand. Although the stablecoin market remains highly concentrated, with Tether’s USDT leading the way, its dominance has been eroding over the past two years.

In fact, the latest Kaiko data shows a decline in USDT market share.

Tether (USDT) is slowly losing market share

In 2024, USDT market share on centralized exchanges (CEXs) will drop from 82% to 74% according to Kaiko. Estimates.

This may be partly due to increased competition from stablecoins like FDUSD, which have benefited from Binance’s zero-fee promotions as well as growing demand for regulated options like USDC.

By the end of June, USDC’s market share had reached an all-time high of 12%, buoyed by trading volumes on Binance, Bybit, and OKX. Yielding stablecoins have also seen a surge in interest, with issuers like Paxos and Tether introducing their own alternatives in Q2 to meet this demand.

The US dollar is in high demand.

The implementation of MiCA has led to a surge in demand for compliant stablecoins, with Circle’s USDC being a major beneficiary. French blockchain analytics firm Quantum recently identified USDC as the leader among regulated stablecoins.

Currently, non-compliant stablecoins make up 88% of total stablecoin volume, but this is expected to change significantly due to the European Markets in Crypto-Assets Regulation (MiCA), which came into effect on June 30. The regulation is likely to cause market makers to favor compliant stablecoins over their non-compliant counterparts.

In response, major crypto exchanges such as Binance, Bitstamp, Kraken, and OKX have already begun delisting non-compliant stablecoins, including Tether’s USDT, for European users. Kaiko data shows that the share of compliant stablecoins has been growing over the past year, reflecting a growing preference for more transparent and regulated options, with USDC emerging as the clear winner in this evolving market landscape.