Market Share Drops Below 84%
Tether’s USDT and Circle’s USDC, the two largest stablecoins by capitalization, have seen their combined dominance fall by more than five percentage points in the past year despite continued growth in absolute terms. Data from DefiLlama and CoinGecko show their joint share has dropped from 91.6% in March 2024 to 83.6% as of early October 2025.
At their peak in March 2024, the two tokens accounted for nearly the entire market. USDT had a capitalization of $99 billion and USDC $29 billion, out of a $140 billion total. That grip has loosened as new entrants launch yield-bearing models and banks prepare regulated offerings.
Industry analyst Nic Carter, a partner at Castle Island Ventures, described the trend in a post on X as evidence that “the stablecoin duopoly is ending.” He attributed the decline to “new assertiveness by intermediaries, a race to the bottom with yield, and new regulatory dynamics post-GENIUS.”
Investor Takeaway
Ethena’s USDe Leads Yield-Bearing Surge
The most striking shift has been the rise of Ethena’s USDe, which passes along returns from basis trades. Its supply has surged to $14.7 billion, making it the standout “success story of the year,” according to Carter. Yield-bearing stablecoins, while facing tighter oversight under the U.S. GENIUS Act, continue to attract capital by offering passive income streams on otherwise static assets.
Carter also pointed to other entrants such as Sky’s USDS, PayPal’s PYUSD, World Liberty’s USD1, Ondo’s USDY, Paxos’ USDG and Agora’s AUSD. He expects more products from both fintechs and banks to appear in the coming year, predicting “many other new stablecoins — including bank-issued ones — will be entering the industry soon.”
Circle itself has been working with Coinbase to introduce yield options on USDC, underscoring the pressure on incumbents to adapt to investor demand for income-bearing designs.
Bank Consortia Enter the Field
Bank-issued stablecoins are being positioned as lower-risk, regulated instruments that could appeal to institutional investors, even as concerns about bank deposit runs and liquidity mismatches remain.
Investor Takeaway
From Duopoly to Fragmentation
The combined market share of USDT and USDC, once near-total, is now eroding. DefiLlama and CoinGecko figures show a 5.4% decline since October 2024 and a 3.4% slide in 2025 to date. Analysts see the trend as part of a broader shift toward a multipolar stablecoin market, shaped by yield-bearing models, regulatory intervention and the entry of global banks.
Whether incumbents adapt successfully or lose further ground depends on how quickly they integrate yield features and respond to regulatory changes. Meanwhile, new players are betting that compliance and innovation will draw capital away from USDT and USDC, reshaping the market structure that has held for much of the past decade.
