Tether’s grip on the crypto market is tightening as USDT continues to flood trading platforms, while rival USDC quietly retreats.
The growing divergence in their behavior is reshaping the stablecoin landscape and raising concerns about liquidity concentration.
USDT Mints Surge, Exchanges Absorb the Supply
So far in 2025, Tether has added over $12 billion in new supply on Ethereum alone. Crucially, this isn’t just idle issuance—on-chain data shows that USDT netflows to exchanges remain strongly positive. In other words, newly minted Tether is flowing directly into trading platforms, providing fresh liquidity for Bitcoin, Ethereum, and other top crypto pairs.
The combination of rising supply and increasing exchange presence reinforces USDT’s central role in crypto trading infrastructure. As shown in the CryptoQuant chart, total stablecoin supply surged toward 74.4 billion, while prices have hovered tightly around the $1 peg—underscoring Tether’s operational consistency even amid its aggressive growth.
USDC Netflows Reveal Institutional Pullback
In contrast, USDC paints a quieter but telling picture. While its reserves on exchanges have crept above 2023 levels, netflows tell the real story: capital is leaving faster than it’s coming in. Institutions appear to be steadily pulling USDC off trading venues, signaling a shift in trust, strategy, or both.
This persistent outflow contrasts sharply with Tether’s expansion, suggesting that traders and institutions increasingly rely on USDT for liquidity—even as calls for greater decentralization and transparency grow louder.
Liquidity Power Imbalance Looms
Tether now represents an estimated 78% of all stablecoin liquidity in the market, leaving altcoins and emerging projects more dependent on a single asset for trade volume and price stability. With fewer alternatives like USDC available on exchanges, smaller tokens face thinner markets and higher slippage risk.
This imbalance could prove destabilizing during periods of market stress, especially if confidence in Tether were ever to waver. As USDT dominance grows unchecked, the need for diversified stablecoin liquidity becomes a critical discussion point for the ecosystem’s resilience.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/tether-dominance-surges-as-usdc-retreats-from-exchanges/