As demand for dollar-pegged liquidity continues to rise, Tether’s [USDT] footprint is beginning to compete with Ethereum [ETH] for the market’s #2 spot.
Things are heating up!
Tether closes in on Ethereum
USDT’s market cap has continued to climb alongside stablecoins’ foothold in the space. This comes amid Ethereum’s (and much of the greater market’s) struggles under bearish conditions.
That contrast is critical.
Source: X
Data per Cryptorank showed that the gap between Ethereum and Tether’s market cap is narrowing at a steady pace. Tether was at $185 billion while Ethereum sat at $272 billion at the time of writing.
With stablecoins gaining ground year after year, the idea of Tether flipping Ethereum for the #2 spot no longer feels far-fetched.
Supported by real usage
According to their recently released quarterly report, Tether’s monthly active on-chain users hit a new ATH in Q4 2025. The number is roughly 24.8 million.
Source: Tether
More importantly, USDT made up 68.4% of all stablecoin monthly active users during the quarter. Demand has remained consistently strong through 2024 and 2025.
Despite the arrival of newer competitors, most real activity continues to flow through Tether, an advantage that has proven difficult to dislodge.
Ethereum’s supply pressure isn’t helping
Source: Alphractal
Recent data proved that larger ETH holders have been reducing exposure. Whale and shark wallets are selling more than they’re buying.
Source: Alphractal
Importantly, this isn’t just ETH moving onto exchanges for operations. Exchange reserves have stayed relatively flat, which means there’s more selling pressure entering the market.
Source: Alphractal
As Alphractal CEO Joao Wedson noted, this kind of activity usually starts at the top of the ownership stack and tends to drag prices lower through sell-side pressure.
Source: Alphractal
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