USDT Captures $5 Billion in One Month... "Whales Abandon USDC·USDe and Return"

▲ Tether (USDT), Gold/AI Generated Image

Tether's USDT has seen an increase of over $5 billion in the past month, re-establishing its dominance in the stablecoin market. In contrast, competing stablecoins like USDC, USDe, and PYUSD collectively decreased by $4.2 billion during the same period, clearly showing a trend of funds in the market being reallocated towards Tether rather than new inflows.

Bitcoin.com reported on May 20 (local time) that USDT's supply reached approximately $189.7 billion, accounting for nearly 60% of the total stablecoin market. Including USDC, the two major stablecoins comprise about 93% of the entire market.

The net increase in the stablecoin market over the past month was approximately $900 million, representing only 0.3% of the total supply. Bitcoin.com analyzed that most of the new funds entering the market were not new demand but rather USDT demand that replaced redemptions of USDC, USDe, and PYUSD. The over $5 billion increase in USDT, it explained, is more akin to a shift of funds from competing products to Tether than a strong overall expansion of the stablecoin sector.

The biggest pressure came from Ethena's USDe. USDe decreased by 28% in the past month and has fallen by approximately 34% year-to-date amid continuous outflows since October 2025. PayPal's PYUSD and Circle's USDC also saw declines during the same period, but their drops were smaller than that of USDe.

Bitcoin.com explained this trend with two factors. First, the stablecoin regulatory environment in the US has tilted in favor of Tether's position. The GENIUS stablecoin regulation bill, which the US Senate is finalizing, has raised questions about the regulatory suitability of new algorithmic and synthetic dollar products, prompting institutional users to move towards established issuers. Second, a general risk-off sentiment in the market has driven funds towards USDT, the most liquid stablecoin.

Bitcoin.com noted that while Tether's market share slightly decreased last month when the stablecoin market surpassed $320 billion, recent data shows a reversal of this trend. With the overall market growth slowing, Tether has effectively strengthened its leadership again.

An impact is also expected on decentralized finance protocols that use USDe and PYUSD as collateral or liquidity layers. Bitcoin.com analyzed that the decrease in the supply of these stablecoins could have subsequent effects on borrowing rates and profit opportunities across the lending market.

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