Out with the old In with the New. USDC maintains momentum. Is USDT on the way out?

  • To recall, “Market Dominance” (or Market Capitalization Dominance) just means the share of the total crypto market that a coin enjoys. If a coin has 5% Market Capitalization Dominance, that means that 5% of all the money in cryptos is in that one coin.

Why does Tether’s decline matter?

  • This is just a measure of how much people favor institutionalized capital. Tether is in trouble with regulators and lacks the transparency that large US banks would want.
  • In general it matters because we can also learn how “risk on” or “risk off” market participants are.

With that in mind, here are two charts. They show that USDT and USDC, respectively, have gained in Market Cap Dominance during this crypto winter.

USDT:

USDC:

However, when you combine them, you get a different view of the matter. Here’s a look at those two charts combined, with an additional metric: the Dominance Ratio of the coins (in white).

That chart shows that while both coins have increased this year in dominance, USDC has massively gained in dominance relative to USDT. That’s why the white line is declining.

We might want to check to see if people are abandoning Tether in their trading activities. Surprisingly, they aren’t. Notice how the yellow line is the same? That’s the ratio of volume for the two coins.

What does that mean?

Take home point: institutions are continuing to favor USDC and so are HODL-ers (and maybe they’re the same people).


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