Largest stablecoins by market capitalization

Over the last few years, stablecoins have experienced exponential growth in terms of global adoption and settlement volume.

An important metric used to measure this growth is market capitalization, or “market cap”—the sum value of all coins in circulation at a given moment.

To calculate the market cap of a stablecoin, we simply take circulating supply and multiply it by the value of each coin. If the price of token A is $3 and it boasts a circulating supply of one hundred million tokens, its market capitalization would equal $300 million (3*100,000,000).

Market capitalization naturally fluctuates due to coin issuance and price volatility. However, in the case of stablecoins, price volatility plays a significantly smaller role, as these assets are designed to maintain a consistent price peg—usually to fiat currencies.

Market cap is a crucial metric for stablecoins because it provides an immediate snapshot of token demand and investor confidence. Investors may view larger cap stablecoins as being more secure and trustworthy than lower cap alternatives, however that is not always the case.

In this article we will examine the top stablecoins by market cap, the mechanisms that contribute to stability and the differences between each token. We’ll also reflect on why these stablecoins have risen to prominence and why investor demand for these “stable” tokens is so high.

If we look at a snapshot of the top five stablecoins at press time by market cap, you may notice a few commonalities between all of them:
 

1. Tether USDT: $140 billion
2. USDC (USDC): $42 billion
3. Ethena (USDe): $5.9 billion
4. Dai (DAI): $5.3 billion
5. First Digital USD (FDUSD): $1.7 billion
    

Let’s examine how each of the above coins are similar are how this relates to market cap:

• US dollar-centric: All of the above listed stablecoins reference the US Dollar. That is, they represent tokenized US Dollars which can be programmed to perform a variety of functions using smart contracts. The overwhelming majority of all stablecoins reference the US Dollar, with relatively few being pegged to other major currencies such as the Australian Dollar or the Japanese Yen.
   
• Large market caps: Each listed stablecoin has a market cap of over $1 billion, making them extremely liquid for investors of all sizes. It’s exceptionally important for the market cap to be large enough such that users can easily transact with a stablecoin. Otherwise, investors may find that swapping in and out of a token incurs unwanted slippage. Stablecoins with exceptionally low market caps may not be widely adopted by many platforms which limits their utility within the crypto ecosystem.
   
• Stable pegs: All of them aim to maintain a consistent value within 1 cent of a US Dollar, and none have experienced noteworthy depegs (at press time). One of a stablecoin’s critical functions is to attempt to maintain a stable peg with its reference asset. Small and short-lived depegs are relatively common and occur due to a variety of factors. Larger, more sustained depegs occur much less frequently, but their impact can be seismic. When a stablecoin has a significant depeg, there will be a noticeable disparity between the number of coins in circulation and the total value of those coins, which in turn will depreciate the market cap. 

In some ways, market cap can be viewed as a barometer of the health and trustworthiness of a stablecoin. It reflects the health of the token in that market cap will inevitably increase with demand, resulting in the underlying issuer minting more coins into circulation. Further, seeing that millions of other investors are prepared to use a blockchaib-based coin engenders trust that the stablecoin should work as expected. 

It’s important to track and monitor the capitalization because it may act as a signal that something is wrong. For example, if you use a coin that typically has a market cap in the region of $1 billion, then one day you notice a sharp decline in this figure, you may want to question why that is. 

External market events have in the past triggered a large spike in redemptions, where holders of coins return it to the issuer to redeem their fiat equivalent. A sudden drop or increase in market cap almost certainly warrants further investigation. 

Let’s dive a little deeper into the top 4 stablecoins, starting with the largest Tether (USDT). 

Tether was one of the first cryptocurrencies to be pegged to the US Dollar, and like many other stablecoins of its kind, is fully collateralized by a selection of real world assets. 

Originally conceived as ‘Realcoin’ in 2014 by Brock Pierce, Reeve Collins and Crag Sellars, it was rebranded in November 2014 to “Tether,” highlighting its primary function of being pegged 1:1 with fiat currencies.

Initially, Tether operated solely on the Bitcoin network via the Omni Layer Protocol. With the exponential growth of Tether between 2016 and 2020, many new chains onboarded USDT. 

Today, it can be traded and bridged across over 20 blockchains and is the most widely adopted stablecoin in terms of settlement volume and utility. This is despite ongoing scrutiny over the lack of a full audit of its reserves and numerous controversies over the years, often resulting from a lack of operational transparency. The company currently publishes quarterly reserve reports that are audited by an independent accountancy firm, in an effort to address transparency issues.

Formerly known as USD Coin, USDC is another collateralized stablecoin that references the US Dollar. 

USDC was the birth child of a joint initiative between Circle and Coinbase. In a bid to engender greater trust in digital payments, co-founders of Circle Jeremy Allaire and Sean Neville were motivated to create a stablecoin that was fully compliant with regulators. 

USDC was officially launched in 2018 after Circle partnered with Coinbase to create the Centre Consortium—the USDC governing body. As with tether, in its infancy it operated solely on one chain, in this case Ethererum as an ERC-20 token. It later expanded to many other blockchains and likewise enjoys widespread adoption. 

Circle provides monthly attestations of its reserves as part of a longstanding endeavour to demonstrate security and transparency. 

USDe is a newer entrant into the top five stablecoins after experiencing exponential growth in 2024. 

Created by Ethena Labs, USDe is a decentralized stablecoin unlike Tether and USDC. It represents a stable synthetic dollar backed by other cryptocurrencies, such as Ethererum (ETH), Bitcoin (BTC) and Tether (USDT). It is not over-collateralized like comparable crypto-backed stablecoins and uses an altogether different mechanism to manage stability. 

What makes USDe unique is the use of delta-hedging. For each USDe that is minted, a short position of equal size is opened on a derivatives exchange, meaning that any depreciation in the assets backing the stablecoin are accounted for. 

Let’s imagine $1,000 worth of BTC was used as collateral to mint $1,000 worth of USDe. At the time of minting, a short position equal to $1,000 of Bitcoin is opened, meaning that price volatility is less likely to impact the stability of USDe. If the price of Bitcoin rises, the short position will generate an unrealized loss but this will be offset by the increase in value of the collateral.

MakerDAO’s DAI is a crypto-backed, overcollateralized stablecoin that references the US Dollar. MakerDAO was founded in 2014 by Danish entrepreneur, Rune Christensen with the aim of creating a decentralized stablecoin devoid of any dependence on centralized authorities or legacy assets. 

Launched in December 2017 as Single-Collateral DAI (SCD), the stablecoin maintains its peg through a system of collateralized debt positions, or CPDs. 

Investors seeking to mint DAI initially had to lock up Ethereum (ETH) into vaults, but after Multi-Collateral Dai (MCD) was launched in December 2019, other tokens such as USDC could be used as collateral. 

Because Dai is decentralized, it is highly transparent, enabling anyone to check the state of reserves at any time. Over-collateralization and the systems on liquidation mechanism contribute to the stability of the peg. Holders of the Maker (MKR) token have a say in how the protocol is governed. 

All of the largest stablecoins have a few things in common in terms of utility:

• Medium of exchange: Perhaps the most obvious use case for stablecoins is the ability to park capital into a crypto-native asset that will maintain a relatively stable value. This is why stablecoins—particularly fiat-backed stablecoins— are so widely used for trading on centralized and decentralized platforms. 
• Yield: All of the top stablecoins can be used in DeFI to generate yield by lending on DeFi platforms, providing liquidity on decentralized trading platforms, liquidity mining and by staking. Note that engaging these activities comes with considerable counterparty risk and you could lose all of your capital for doing so. 
• Programmability: One reason why stablecoins have so much utility is that they can be deployed into smart contracts to perform a variety of different functions. For example, on the prediction market Polymarket, when users make a bet on a particular outcome, their USDC is placed into a smart contract. When the outcome of the market has been confirmed, the USDC is then released by the smart contract to those on the winning side. 
• Margin: Stablecoins, particularly Tether (USDT), make up the lionshare of margin used for futures contracts. This is particularly useful in jurisdictions where platforms cannot offer fiat margined futures, owing to local laws and regulation. 
• Exposure to the US Dollar: Many stablecoin holders use them simply to save in dollars. This may be because their local currency has suffered from inflation or simply that they want exposure to the US Dollar where they would otherwise struggle to. 

There are two primary ways to purchase stablecoins.The first option likely applies to most traders and involves simply swapping other crypto assets like Solana (SOL) or XRP (XRP) for stablecoins at a centralized or decentralized trading platform. 

By depositing your fiat or crypto into a centralized exchange that provides stablecoin markets (check in advance), it should then be relatively straightforward to complete the exchange and use your tokens as you see fit.

If you are using a Web3 wallet, navigate to a decentralized platform that has sufficient liquidity for the trading pair you are interested in. Before completing any swap, check to ensure that you will not incur excessive slippage.

The second and potentially more onerous option is to go to a stablecoin issuer directly. Note that there may be a minimum acquisition amount, such as $100,000 in the case of Tether. 

Further, you will be required to comply with Anti-Money Laundering (AML), Know Your Customer (KYC), and Counter-Terrorist Financing (CTF) regulations to set up the account. 

Once everything has been approved, you can then wire transfer your US Dollars into the issuer's bank, who will then mint the corresponding stablecoins and credit them to your corresponding crypto wallet address. The tokens can then be distributed as needed.

Stablecoins have become integral to the cryptocurrency ecosystem due to their stability, liquidity, and utility across trading, yield generation, and programmability. 

Their market capitalization serves as a critical measure of demand and trust, with top stablecoins like USDT, USDC, and DAI showcasing diverse mechanisms to maintain their pegs and stability. As adoption grows, understanding their unique features and market dynamics is essential for informed participation in the digital asset space.

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