Tether's Market Share Surges to 78% as USDC Retreats

Tether's dominance in the stablecoin market has surged as USDC, another prominent stablecoin, has retreated from exchanges. This shift in market dynamics is significant as it reflects changing preferences and strategies among stablecoin users and issuers. Tether, known for its USDT stablecoin, has seen an increase in its market share, indicating a growing trust and reliance on its services. This trend is particularly notable given the regulatory scrutiny and market volatility that stablecoins have faced in recent years.

So far in 2025, Tether has added over $12 billion in new supply on Ethereum alone. Crucially, this isn’t just idle issuance—on-chain data shows that USDT netflows to exchanges remain strongly positive. In other words, newly minted Tether is flowing directly into trading platforms, providing fresh liquidity for Bitcoin, Ethereum, and other top crypto pairs. The combination of rising supply and increasing exchange presence reinforces USDT’s central role in crypto trading infrastructure. As shown in the CryptoQuant chart, total stablecoin supply surged toward 74.4 billion, while prices have hovered tightly around the $1 peg—underscoring Tether’s operational consistency even amid its aggressive growth.

In contrast, USDC paints a quieter but telling picture. While its reserves on exchanges have crept above 2023 levels, netflows tell the real story: capital is leaving faster than it’s coming in. Institutions appear to be steadily pulling USDC off trading venues, signaling a shift in trust, strategy, or both. This persistent outflow contrasts sharply with Tether’s expansion, suggesting that traders and institutions increasingly rely on USDT for liquidity—even as calls for greater decentralization and transparency grow louder.

Tether now represents an estimated 78% of all stablecoin liquidity in the market, leaving altcoins and emerging projects more dependent on a single asset for trade volume and price stability. With fewer alternatives like USDC available on exchanges, smaller tokens face thinner markets and higher slippage risk. This imbalance could prove destabilizing during periods of market stress, especially if confidence in Tether were ever to waver. As USDT dominance grows unchecked, the need for diversified stablecoin liquidity becomes a critical discussion point for the ecosystem’s resilience.

The retreat of USDC from exchanges suggests a strategic move by its issuer, Circle, which may be focusing on other aspects of its business or adjusting to regulatory changes. This could also be a response to the increasing competition in the stablecoin market, where Tether has established a strong foothold. The shift in dominance highlights the importance of regulatory compliance and market stability in the stablecoin ecosystem. As stablecoins continue to play a crucial role in the broader cryptocurrency market, the dynamics between Tether and USDC will likely remain a key area of interest for market participants and regulators alike. The evolving landscape of stablecoins underscores the need for robust regulatory frameworks and market transparency to ensure the stability and integrity of these digital assets.