Tether and Circle control 85% of stablecoin supply as market concentration stays near record highs

The stablecoin market has a duopoly problem. Tether’s USDT and Circle’s USDC together account for roughly 85% of the entire stablecoin market, combining for approximately $257.7 billion in circulating supply out of a total market capitalization of around $302.9 billion. The numbers behind the dominance USDT remains the undisputed heavyweight, sitting at approximately $183.4 billion in supply and commanding 60.5% of the total stablecoin market. USDC trails at around $74.3 billion, good for a 24.5% share. Together, that’s 85.1% of every dollar-pegged digital token in circulation. To put the concentration in more formal terms, the stablecoin market’s Herfindahl-Hirschman Index sits at approximately 4244. The HHI is a standard measure economists use to gauge market concentration, where anything above 2500 is considered “highly concentrated.” Newer entrants like World Liberty Financial’s USD1, along with more established names like DAI and Ethena’s USDe, each hold individual market shares typically below 3-4%. USDC punches above its weight Despite holding less than half of USDT’s supply, Circle’s stablecoin captures between 60% and 70% of on-chain transaction volume in recent periods. U...