USDT has surpassed Ethereum in market capitalization: stablecoins are becoming a dominant force amid the ETH collapse
Key point in the crypto market: Tether's stablecoin USDT temporarily took second place by market capitalization, surpassing Ethereum (ETH). This happened after the price of ETH crashed to a yearly low on Friday, pushing the market cap of the second-largest cryptocurrency below $185 billion. Meanwhile, USDT's market capitalization remained stable near the $186 billion mark.
Ethereum's decline was sharp: the asset lost 5.2% of its value in 24 hours, reaching $1,510. This shift in ranking is not coincidental — it reflects a fundamental change in market sentiment. Investors, fearing further volatility, are massively moving into stablecoins, which now account for nearly 15% of the total crypto market capitalization.
Market Chooses Stability
Head of Research at Bitrue Research Institute, Andri Fauzan Adziim, emphasizes: the current situation is a vivid illustration that the market prefers stability over volatility. Stablecoins have ceased to be just a hedging tool; they are becoming a key element of infrastructure.
Data from 21Shares confirms this trend: while during the previous bear market, the supply of stablecoins decreased by more than 30%, it has now not only recovered but is also hitting new all-time highs. The total supply of stablecoins has already exceeded $300 billion. According to analysts, this is the strongest evidence that demand for stablecoins is no longer cycle-dependent — they have become an independent asset class.
Chief Operating Officer of Bitget Wallet, Alvin Kan, called this an important milestone that highlights the explosive growth and dominance of stablecoins. In his words, this indicates strong demand for reliable and liquid ways to enter and exit funds during periods of volatility. However, he reminds: Ethereum must continue to offer compelling utility to maintain its position.
Not Everyone Is Bearish
Despite the decline, not all market participants have panicked. The price of ETH has returned to key support levels that the market last tested in October 2023 and April 2025. The Ethereum ecosystem recently faced internal changes following a series of executive resignations and a 20% reduction in the Ethereum Foundation's staff. This week, key developers of the foundation launched a new non-profit organization, Ethlabs, with support from the ETH treasuries of Bitmine and Sharplink.
Some investors viewed the decline as an opportunity. Treasury company Sharplink bought coins during the dip, making its first purchase in eight months — 5,000 ETH. Bitmine, chaired by Tom Lee, is also accumulating coins at low prices, adding another 76,881 ETH over the past week.
A similar reshuffle occurred lower in the ranking. Circle's stablecoin USDC surpassed Ripple's token XRP in market capitalization after XRP dropped to $1 — a low not seen since November 2024. As a result, XRP's market cap stood at $64 billion compared to USDC's $73.6 billion.
My expert conclusion: The current situation is not just a temporary shift. The market is voting for stability, and stablecoins are becoming its new pillar. Ethereum must prove that its technological value outweighs the current market uncertainty. If ETH cannot offer compelling growth drivers, we may see stablecoins solidify their second-place position in the long term.