The stablecoin USDT has surpassed Ethereum in market capitalization: the market is fleeing to stability amid the ETH crash.
The cryptocurrency market is experiencing a significant shift in power: Tether's stablecoin USDT temporarily took second place by market capitalization, surpassing Ethereum. The reason was a sharp collapse in ETH, which on Friday reached a yearly low, dropping to the $1510 mark.
Ethereum's market capitalization crashed below $185 billion, while USDT held near $186 billion. ETH fell 5.2% in a day, allowing the stablecoin to rise to the second spot in the ranking of the largest crypto assets.
This event is a clear signal that the market, amid high uncertainty, is choosing liquidity and stability. Stablecoins now account for nearly 15% of the total crypto market capitalization, and their combined supply has exceeded $300 billion, reaching new all-time highs. Unlike the previous bear cycle, when stablecoin supply shrank by more than 30%, we are now seeing the opposite picture — steady growth, independent of the cycle phase.
Ethereum Foundation in crisis, but 'whales' are buying
The Ethereum ecosystem is experiencing internal turmoil: recent departures of key executives and a 20% staff reduction at the Ethereum Foundation have undermined some investors' confidence. However, not everyone is bearish. Large players have seen the drop in ETH as an entry opportunity.
Treasury company Sharplink made its first purchase in eight months — 5,000 ETH. Bitmine, chaired by Tom Lee, accumulated another 76,881 ETH over the past week. This suggests that institutional investors believe in Ethereum's long-term potential and are using the downturn to build positions.
USDC also overtakes XRP
A similar reshuffle occurred lower in the ranking: Circle's stablecoin USDC surpassed Ripple's token XRP in market capitalization. XRP's market cap fell to $64 billion against USDC's $73.6 billion after XRP dropped to $1 — a low since November 2024.
My view as an analyst: The market is clearly signaling a shift in priorities — investors are fleeing risk for the 'safe haven' of stablecoins. This is not just a technical reshuffle but a fundamental shift: stablecoins are becoming not just a trading tool but an independent asset class attracting capital attention. Ethereum must prove its utility and competitiveness in the new environment, otherwise the outflow of funds into stablecoins will continue.