Ethereum has reclaimed its status as the leading blockchain for Tether (USDT), surpassing Tron with a supply of $60.3 billion. This development comes after a notable 9.3% increase in USDT issuance on Ethereum over the past week, while Tron experienced a 1.5% decrease, bringing its supply to $58.1 billion. This marks Ethereum’s return to dominance in the USDT market for the first time since August 2022, according to data provided by DefiLlama.
The total supply of USDT across all platforms has reached an unprecedented $132.9 billion, reflecting growing demand and acting as a bullish indicator for the broader cryptocurrency market. Stablecoins like Tether play a vital role in providing liquidity and facilitating seamless capital flow within the ecosystem.
Factors Driving Ethereum’s Resurgence
Ethereum’s increasing adoption by financial institutions for tokenizing assets backed by the US dollar has significantly contributed to its resurgence. In contrast, Tron continues to maintain strong appeal in regions facing high inflation due to its low transaction fees and fast processing speeds, enabling efficient stablecoin usage for savings.
Ethereum solidified its lead in USDT supply on November 21, 2024, a position further strengthened by the minting of $2 billion worth of USDT on Ethereum by November 23. During the same period, Tron minted only $1 billion in comparison.
Other blockchains contributing to Tether’s circulation include BNB Chain, which holds $4.58 billion, Arbitrum with $3.09 billion, and Avalanche at $1.31 billion.
Broader Stablecoin Ecosystem Dynamics
Tether remains the world’s largest stablecoin by market capitalization, valued at $132.3 billion. It is followed by Circle’s USD Coin (USDC), with a market cap of $39 billion. Ethereum also dominates USDC circulation, hosting $26.3 billion, or 67.5% of its total supply.
Tron, however, lags significantly in USDC supply due to earlier decisions by Circle and Binance to withdraw support for the stablecoin on the Tron network. Despite this, Tether remains critical within the digital asset ecosystem, reaching a reported user base of 350 million globally as of October 2024.
Cantor Fitzgerald’s Stake in Tether
In a related development, financial services firm Cantor Fitzgerald has acquired a 5% stake in Tether, valued at up to $600 million. This acquisition positions the company strategically amid increasing regulatory scrutiny of Tether’s operations.
Cantor Fitzgerald’s CEO, Howard Lutnick, who is set to serve as the U.S. Secretary of Commerce under President-Elect Donald Trump, may play a key role in addressing Tether’s regulatory challenges. Lutnick’s political influence and leadership are expected to help the stablecoin issuer navigate ongoing investigations by the U.S. Attorney’s Office for the Southern District of New York, which include allegations of illicit activity involving USDT.
Tether’s largest shareholder, Giancarlo Devasini, has reportedly expressed confidence in Lutnick’s ability to manage potential regulatory threats. Lutnick, who is currently involved in shaping the incoming administration, is expected to step down as Cantor Fitzgerald’s CEO once his cabinet appointment is confirmed.
Looking Ahead
Ethereum’s renewed dominance in USDT supply highlights the blockchain’s critical role in the cryptocurrency ecosystem. As Ethereum continues to expand its adoption for institutional use cases, the broader stablecoin market is expected to witness further growth.
Meanwhile, Cantor Fitzgerald’s strategic investment in Tether underscores the increasing intersection of traditional finance, political influence, and the cryptocurrency sector, setting the stage for significant developments in the regulatory landscape.