USDT has surpassed Ethereum in market capitalization: stablecoins are taking over the market amid the ETH crash
The cryptocurrency market is experiencing a landmark shift: Tether's stablecoin USDT temporarily took second place by market capitalization, surpassing Ethereum. The reason is a sharp drop in the ETH price to an annual low of $1,510, which pushed the market cap of the second-largest cryptocurrency below the $185 billion mark. Meanwhile, USDT's market cap remained stable, holding near $186 billion.
This event occurred amid a sharp 5.2% decline in the Ethereum price over the past day. ETH tested the $1,510 level — a critical support zone last seen by the market in October 2023 and April 2025. This drop allowed USDT to temporarily claim the second spot in the ranking of the most capitalized crypto assets.
The market chooses stability
Such a shift is a clear confirmation of a fundamental change in market participant sentiment. Amid high volatility, investors are massively moving into stablecoins, which now account for nearly 15% of the total crypto market capitalization. Analysts note that the total supply of stablecoins has exceeded $300 billion and is hitting all-time highs.
Notably, during the previous bear cycle, the stablecoin supply decreased by more than 30%. However, we are now seeing the opposite trend — demand for them is growing regardless of the cycle phase. This indicates that stablecoins have become one of the defining use cases for cryptocurrencies, rather than just a temporary safe haven.
The Chief Operating Officer of Bitget Wallet emphasized that this is a landmark milestone demonstrating the explosive growth and dominance of stablecoins. According to him, this shows strong demand for reliable and liquid on-ramp and off-ramp methods during periods of volatility, but also serves as a reminder that Ethereum must continue to offer compelling value to maintain its position.
Not everyone is bearish
Despite the decline, some major players viewed the ETH dip as an opportunity. Treasury company Sharplink bought 5,000 ETH during the dip — its first purchase in eight months. Bitmine, chaired by Tom Lee, has also been actively accumulating coins at low prices, adding another 76,881 ETH over the past week.
A similar reshuffling occurred lower in the ranking. Circle's stablecoin USDC surpassed Ripple's XRP token in market capitalization after XRP fell to $1 — its lowest level since November 2024. As a result, XRP's market cap stood at $64 billion compared to USDC's $73.6 billion.
My analysis: The market is clearly signaling a shift in priorities. While Ethereum grapples with internal issues — including layoffs at the Ethereum Foundation and resignations of key developers — stablecoins are strengthening their role as the foundational infrastructure of the crypto economy. However, I believe the current situation is not a death sentence for ETH, but rather a test of resilience. Large purchases by institutional players suggest that the bottom may be near. The question is whether Ethereum can offer the market compelling catalysts for recovery.