Nansen expects Tether’s lead to endure even as rivals such as USDC clock faster growth rates.“With nearly 3x as many users as Uniswap and 50+% more transactions than the next app, Tether is by and far the largest use case of onchain activity,” Nansen said.“Despite the potential dispersion in stables, we inevitably believe this is a ‘winner-takes-most’ market dynamic,” the Web3 researcher added. Tether has 66% of stablecoin market share.
But USDC now faces “intensifying competition as major traditional financial institutions (i.e., Fidelity, PayPal, and banks) enter the market,” Nansen said, adding that stablecoins, including PayPal’s PYUSD and Ripple USD, are “rapidly gaining traction.” On April 25, payment processor Stripe tipped plans to create a new stablecoin product of its own after buying stablecoin platform Bridge last year.
The company earns revenue by accepting US dollars to mint USDT and subsequently investing those dollars into highly liquid, yield-bearing instruments such as US Treasury bills. “Given the growth of USDT and USDC, the users are clearly expressing that they do not necessarily care about the yield as they are forgoing it to Tether and Circle -they simply want access to the most liquid and ‘stable’/ least-likely-to-depeg stablecoin out there,” Nansen said.
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Author / Journalist: Cointelegraph by Alex O’Donnell
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