#HighlightPosts#  Despite the competition, Tether dominates the stablecoin market with a 66 percent market share.

Despite the increasing competition from new issuers, the stablecoin market is still largely dominated by a few major players. According to data from research firm Web3 Nansen, Tether’s USDt
USDTUSD
token continues to lead the stablecoins pegged to the US dollar, even as competition increases.
According to Nansen’s April 25 report, Tether’s market share among stablecoins is around 66 percent, compared to around 28 percent for USDC
USDCUSD
. Ethena’s USDe stablecoin is a distant third with a market share of around 2 percent.
Nansen predicts that Tether will continue to lead, even as rivals like USDC grow faster.
“Tether is by far the largest user base of onchain activity, with nearly as many users as Uniswap and over 50% more transactions than the latter app,” Nansen said.
“Despite the potential for a potential breakout in stablecoins, we believe this is a market with an inevitably ‘winner takes most’ dynamic,” the Web3 researcher added.
Tether is also the most profitable stablecoin issuer, making almost $14 billion in profit in 2024. The company generates revenue by accepting US dollars to mint USDT and investing those dollars in highly liquid, yielding instruments like US Treasury bonds.
“Looking at the growth of USDT and USDC, it’s clear that users are sacrificing yield and leaving it to Tether and Circle; they simply want access to the most liquid and ‘stable’/least likely to depeg stablecoin,” Nansen said.
According to Nansen, USDC adoption accelerated after the US President Donald Trump’s election victory in November created a more favorable regulatory environment for crypto in the US.
The report noted that Circle’s US-regulated stablecoin was “particularly attractive to institutions with regulatory clarity requirements.”
However, Nansen said that USDC now faces “intensifying competition from large traditional financial institutions such as Fidelity, PayPal, and banks,” adding that stablecoins such as PayPal’s PYUSD and Ripple USD are “rapidly gaining momentum.”
On April 25, payment processor Stripe announced plans to launch its own stablecoin product after acquiring stablecoin platform Bridge last year.
Despite having a smaller market share, Ethena’s yielding USDe stablecoin “remains competitive in most areas going forward,” the report said, thanks to its integrations with centralized exchanges (CEX) and decentralized finance (DeFi) protocols.
Since its launch in 2024, Ethena’s stablecoin has generated an average annualized return of approximately 19 percent, according to Ethena’s website.