Long perceived as the unstoppable dolphin of Bitcoin, Ethereum today sees its position threatened by an unexpected adversary: Tether. On Polymarket, bets on ETH flipping in 2026 jumped from 17% to more than 59% in a few weeks. A trend that raises questions.
In brief
- The chances of Ethereum losing its second place in 2026 have increased from 17% to over 59% on Polymarket.
- Over five years, the capitalization of ETH has only increased by 11.75%, compared to 622.5% for Tether's USDT.
- Ethereum spot ETFs have lost approximately 65% of their assets under management since October 2024.
- The stablecoin market now exceeds $310 billion, 58% of which is held by Tether.
Tether is eating away at Ethereum, not Bitcoin
The scenario that is emerging in 2026 is as surprising as it is instructive. It's not Bitcoin that threatens Ethereum's second place, it's Tether. According to Polymarket data, more than 59% of bettors anticipate this change. At the start of the year, this probability did not exceed 17%.
Over the past five years, ETH's market capitalization has only grown 11.75%, reaching around $240 billion. At the same time, USDT grew by 622.5%, with its capitalization now close to $184 billion. XRP and USDC also performed better than Ethereum over this period.
The logic is simple: Ethereum needs risk appetite to see its price rise. Tether thrives in exactly the opposite context, when investors seek security.
In times of macroeconomic turbulence, American customs duties, geopolitical tensions, hopes of Fed rate cuts eroding, capital flees volatility and takes refuge in stablecoins.
The total stablecoin market has also crossed the $310 billion mark, compared to only $5 billion in 2020. Tether captures 58%. This pending liquidity embodies capital positioned in withdrawal, ready to re-enter when conditions are better. In the meantime, they are mechanically inflating the capitalization of Tether.
Institutional disaffection further worsens the picture for Ethereum. Spot ETH ETFs in the United States saw their assets under management fall by around 65%, from $31.86 billion in October 2024 to $11.76 billion in March 2026. A sharp decline, which contrasts with the dynamism of Bitcoin ETFs.
ETH under technical and fundamental pressure
On the technical analysis side, the picture is hardly more reassuring. ETH price is currently in what looks like a “bear flag” pattern on the three-daily chart.
If the break below the lower trend line is confirmed, a bearish target around $1,250 is possible by June 2026. In other words, a new significant downward leg cannot be ruled out.
Added to this is a worrying structural fragility: the leverage ratio on Ethereum recently reached a record level, a sign that speculation weighs as heavily as the reserves available on the exchanges. In this context, the slightest bad news can trigger cascades of liquidations.
However, Ethereum is not without its strengths. Whales accumulated nearly 466,500 ETH during the latest decline, and activity on Ethereum L1 is showing signs of recovery, driven in particular by stablecoins and tokenized assets. The network is also preparing its post-quantum resistance by 2029, a structuring project for the long term.
In short, the battle for second place is not between ETH and BTC, it is between two radically different investment philosophies. As long as risk aversion dominates the markets, Tether will continue to widen the gap. For Ethereum, the real turnaround will depend less on its technological fundamentals than on the return of a global appetite for risky assets.
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