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Analysis of on-chain stablecoin data reveals decline in USDT dominance


In 2019, Tether (USDT) had a global stablecoin dominance of 89%, but it has since fallen to just under 50%, according to on-chain data provided by Glassnode — analyzed by CryptoSlate.

Throughout 2020 and 2021, other stablecoins like USD Coin (USDC) and Binance USD (BUSD) began to rise, with USDC reaching 33% dominance and BUSD reaching 16% dominance. DAI, on the other hand, remained constant.

Stablecoins: Supply Dominance (Relative)
Stablecoins: Supply Dominance (Relative) / Source: Glassnode.com

Recovery on the horizon

In May, USDT saw $20 billion in redemptions but has since begun to recover. The growth of stablecoins slowed, with a peak of $24 billion daily inflows. Outflows also increased but peaked at only $8 billion, indicating that most of the capital remains stablecoins.

USDT remains the only stablecoin to have made higher highs in daily transactions and still see strong demand.

Stablecoins: Aggregate Supply Net Position Change
Stablecoins: Aggregate Supply Net Position Change / Source: Glassnode.com

Total stablecoins on exchanges

There is approximately $40 billion worth of stablecoins on exchanges, with a total of $4 billion being redeemed this week alone. This indicates that investors still believe in stablecoins and are likely waiting for the next bull run or dip.

All Stablecoins: Balance on Exchanges
All Stablecoins: Balance on Exchanges / Source: Glassnode.com

By analyzing the STBL virtual asset Glassnode data – which aggregates data from all ERC20 stablecoins – we can see the growth of stablecoins was significant up until March, reaching a peak of $24 billion in daily redemptions.

Risk-on to Risk-off

This year’s risk-off environment has shifted from inflows to outflows for stablecoins, though the outflows have been relatively small, reaching a maximum of $8 billion. Despite this, the majority of capital remains in stablecoins.

Stablecoins: Transaction Count
Stablecoins: Transaction Count / Source: Glassnode.com

USDC saw a 10% rise over the same period and has since increased to 33%. It peaked in June with 38%, leading to speculation about a potential flip of USDT.

On the other hand, BUSD did not gain significant traction until the second half of the year, with a dominance of 10%. It has since grown to 16% dominance and has been gaining momentum, particularly since the collapse of FTX.

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