Tether has become the dominant stablecoin in the cryptocurrency industry. However, the ERC-20 USDT tokens are slowly declining in volume across the exchanges. A very peculiar trend, albeit one that isn’t too disconcerting.
NOTE: Exchanges included in these statistics include Binance,Bibox, Bigone, Bitfinex, Bittrex, Cobinhood, Coinex, Gate.io, HitbTC, Huobi, Kucoin, OKEx, and Poloniex.
The USDT Situation
Among stablecoins, Tether’s USDT clearly stands out. It has the highest market cap and biggest “user” among the top cryptocurrency exchanges today. No other offering comes even close, which is somewhat problematic. Competition among stablecoins would be rather beneficial for everyone.
Over time, Tether’s asset has been issued on multiple blockchains. OMNI Remains the primary chain for USDT tokens. Ethereum was added later on, in the form of ERC-20 tokenized US Dollars. TRON is the third main chain where this asset can be found.
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One would expect the ERC-20 USDT version to be popular. That certainly has been the case in the past. Since the initial issuance in early 2018, the amount of USDT on Ethereum has increased gradually. At the peak in late September 2019, over 1.022 billion ERC-20 USDT is in exchange wallets. A remarkable amount, albeit it has never been reached since.
A Steep Drop in ERC-20 USDT Popularity
Even though Tether remains a popular asset, that doesn’t apply to all versions of USDT. In fact, the number of ERC-20 USDT on exchanges has gone in freefall since October 2019. By October 30, 2019, there were just 546.788 million Ethereum-based USDT tokens on exchanges. A near 50% reduction in a matter of 30 days.
Albeit the supply saw improvements in mid-December, the downtrend continues. Since January of 2020, the number of ERC-20 USDT keeps declining rapidly. As of January 23 of this year, the supply dropped to 513,573,610. That is still a respectable amount, yet the decrease remains clear for everyone to see.
Why this near 50% reduction in ERC-20 USDT takes place, remains a mystery. Several exchanges support all three versions of Tether’s asset today. At this rate, the supply will drop below 500 million in a matter of weeks. Even with bullish cryptocurrency markets, there is no immediate reversal in sight.