Tether’s market share grows to 61%, a two-year high as crypto centralisation grows: a Report

Key Takeaways

• Tether opened the year at a market cap of $66.2 billion, but has grown 22% to $81 billion
• CircleUSD has moved the opposite way, losing 21% of its market cap
• Tether’s share of the stablecoin space is up to 61.5%, its highest mark in two years
• Collapse of TerraUSD in May 2022 and shutdown of BinanceUSD in February have increased concentration in the stablecoin market
• CircleUSD is struggling amid regulatory concerns in US and fallout from banking chaos, when it had 8.25% of its reserves in Silicon Valley Bank
• Growth in market share for Tether should only increase, but concerns persist over reserves underlying the stablecoin
• Centralisation of wealth is a massive stress point for entire crypto industry, whose grasp on the concept of decentralisation continues to slip

Last October, I published a deep dive into the stablecoin wars.  Things have changed a lot since then. 

A few weeks after, in November, FTX collapsed, sending the entire crypto market bananas, capital flowing out of the space en masse. Then in February, the world’s third biggest stablecoin, BinanceUSD, was shut down by regulators (deep dive on that here). 

Finally, in March, the world’s second-biggest stablecoin, Circle USD, depegged to 88 cents amid the banking chaos, before its peg was restored after the US administration guaranteed bank deposits at the fallen Silicon Valley Bank. 

Against all odds, the stablecoin with perhaps the most controversial status, Tether, has been the one with the least drama. 

Hit “play timeline” on the below chart to see the movements of the entire stablecoin market over the last two years – and the growth of Tether. 

TerraUSD and BinanceUSD fall

The below is the previous chart plotted out in static form. We can immediately see a few massive developments. The first is in May 2022, the well-covered collapse of TerraUSD, the LUNA ecosystem going down in flames as its uncollateralised stablecoin model was found to be flawed. 

The second is the BUSD’s shutdown in February 2023, less pernicious to the market and a more gradual decline than UST (thankfully, say crypto investors). Its market cap is currently at $6.2 billion, down from $17.5 billion two months ago, an evaporation of two-thirds of the supply, the final third likely to follow before long. 

The below chart presents the situation clearer, as it…