The stablecoin market is entering a phase of brutal concentration. Tether absorbs almost all new flows, while its rivals take the hit. Between regulatory uncertainties and nervousness in crypto markets, investors now favor liquidity, size and perceived security.
In brief
- USDT supply now exceeds $189.7 billion, or nearly 60% of the total stablecoin market.
- USDC, USDe and PYUSD together lost $4.2 billion in the same month.
- Ethena's USDe has collapsed by 34% since October 2025, revealing a structural crisis in synthetic dollars.
Tether regains control of the stablecoin market
The observation is clear: Tether is strengthening its dominance at an impressive speed. Over the past month, the total supply of USDT has grown by more than $5 billion to approximately $189.7 billion. At the same time, several major competitors have suffered massive capital outflows.
Circle's USDC, PayPal's PYUSD and especially Ethena's USDe saw a cumulative decline of $4.2 billion. Result: the overall net growth of the stablecoin market remains almost at a standstill, with only 0.3% increase. This means that this is not actually new capital entering the crypto ecosystem. Investors simply move their funds to Tether.
This dynamic reveals a profound change in market behavior. For several months, institutional investors have favored the most liquid and robust assets. However, USDT remains by far the most used stablecoin in crypto trading, international exchanges and platform liquidity reserves.
The fall of Ethena's USDe perfectly illustrates this trend. The synthetic stablecoin has lost nearly 34% since October 2025. This decline shows the limits of algorithmic or hybrid models in an environment marked by risk aversion.
Today, USDT and USDC together represent approximately 93% of the global stablecoin market. A concentration which recalls the domination of traditional banking giants in traditional finance.
Regulation, DeFi and currency war, the reasons behind USDT’s dominance
The rise of Tether cannot be explained solely by its size. The American regulatory context also plays a central role.
In the United States, discussions around the GENIUS Act and the regulation of stablecoins are creating increasing pressure on projects deemed less transparent or more experimental. Investors want to avoid regulatory gray areas. In this climate, Tether paradoxically benefits from its seniority and market depth.
The slowdown of certain stablecoins could also weaken several decentralized finance protocols. Many still use USDe or PYUSD as collateral for crypto lending and yield strategies. A prolonged decline in their capitalization risks impacting borrowing rates and liquidity in DeFi.
At the same time, this American domination is increasingly worrying Europe. The Qivalis project, now supported by 37 European banks, illustrates this desire to build a credible alternative to the hegemony of the dollar stablecoin. Because today, nearly 98% of global stablecoins remain backed by the US dollar.
This battle now goes beyond the simple framework of crypto. Stablecoins are becoming geopolitical instruments, international payment tools and potentially strategic reserves for companies and states.
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