In a significant reshuffling of the cryptocurrency market, Tether's USDT has surpassed Ethereum (ETH) by market capitalization, claiming the spot as the second-largest digital asset. The milestone was highlighted by a Cointelegraph tweet showing USDT at $186.07 billion, edging out ETH at $184.48 billion. The flip occurred as Ethereum's price crashed 5.2% in 24 hours to a yearly low of $1,510 on Coinbase, dragging its market cap below $185 billion.
The rise of USDT underscores a broader trend: stablecoins now represent nearly 15% of the total crypto market value. Unlike the previous bear market, when stablecoin supply shrank by over 30%, this cycle has seen supply hit record highs, according to a note from 21Shares. Andri Fauzan Adziima, research lead at Bitrue Research Institute, said the shift highlights that traders are leaning toward stability amid Ethereum's volatility. Alvin Kan, COO of Bitget Wallet, called the flip a notable milestone that reflects the dominance stablecoins have achieved in today's crypto ecosystem, adding that deeper stablecoin liquidity supports higher trading volumes and innovation.
Ethereum's ecosystem has faced recent strain, including staff cuts at the Ethereum Foundation that led to an executive exodus and a 20% workforce reduction. However, a new nonprofit, Ethlabs, launched this week with backing from key developers and researchers, receiving treasury support from ETH-holding firms Bitmine and Sharplink. While some investors are cautious, others are buying the dip: Sharplink made its first Ether purchase in eight months with a 5,000 ETH buy on Thursday, and Tom Lee's Bitmine added 76,881 ETH last week, accumulating at these depressed levels.
Meanwhile, Circle's USDC also moved up the ranks, flipping Ripple's XRP in market cap as XRP slid back toward $1, its lowest since November 2024. The events collectively signal a shifting landscape where stablecoins are attracting more capital and trust, potentially reshaping trading behavior and market dynamics in the months ahead.
