As demand for dollar-pegged liquidity continues to rise, Tether’s (USDT) footprint is beginning to compete with Ethereum (ETH) for second place in the market.
It’s heating up!
Tether gets closer to Ethereum
The market cap of USDT has continued to climb alongside the establishment of stablecoins in the space. This comes amid Ethereum (and much of the market as a whole) struggling in bearish conditions.
This contrast is crucial.
Source:
Data from Cryptorank has shown that the gap between the market capitalization of Ethereum and Tether is narrowing at a steady rate. Tether stood at $185 billion while Ethereum stood at $272 billion at the time of writing.
As stablecoins gain ground year after year, the idea of Tether toppling Ethereum for second place no longer seems far-fetched.
Backed by real-world use
According to their recently released quarterly report, Tether’s on-chain monthly active users reached a new ATH in Q4 2025. This number is around 24.8 million.
Source: Attachment
More importantly, USDT accounted for 68.4% of all stablecoin monthly active users during the quarter. Demand remained consistently strong through 2024 and 2025.
Despite the arrival of new competitors, most real-world activity continues to flow through Tether, an advantage that has proven difficult to dislodge.
Ethereum supply pressure doesn’t help
Source: Alphractal
Recent data has proven that large ETH holders have reduced their exposure. Whale and shark wallets sell more than they buy.
Source: Alphractal
It’s important to note that ETH doesn’t just move to exchanges for operations. Foreign exchange reserves have remained relatively stable, meaning there is more selling pressure in the market.
Source: Alphractal
As Alphractal CEO Joao Wedson noted, this type of activity usually starts at the top of the property and tends to drive prices down due to pressure from the sales side.
Source: Alphractal
If Ethereum’s current trajectory persists while Tether continues to benefit from growing stablecoin adoption, the gap between them could close faster than many expect.
Final Thoughts
- Tether’s rush to second place in crypto seems very realistic.
- If whale-led Ethereum selling persists, the USDT-ETH gap could narrow faster.
