Tether’s USDt has overtaken Ether by market capitalization, becoming the second-largest cryptocurrency as ETH fell to its lowest price of the year.
Ether’s market value dropped below $185 billion after a sharp 5.2% decline over 24 hours, with ETH falling to $1,510 on Coinbase, according to TradingView data. The sell-off allowed Tether USDt (USDT), with a market capitalization of around $186 billion, to move ahead of Ether.
Stablecoins Gain Ground as ETH Slides
The flip marks a major moment for the crypto market, showing how much demand has shifted toward stablecoins during periods of volatility.
Andri Fauzan Adziima, research lead at Bitrue Research Institute, told that the stablecoin overtake shows the market is currently favoring stability over ETH’s volatility.
The move also highlights the rapid growth of the stablecoin sector. Stablecoins now represent almost 15% of the total crypto market capitalization, showing that demand for dollar-pegged crypto assets remains strong even during broader market weakness.
According to 21Shares, stablecoin supply fell by more than 30% during the previous bear market, but this cycle is different. Stablecoins are now reaching record highs, which the firm said is strong evidence that stablecoins have become one of crypto’s most important real-world use cases.
ETH Returns to Key Long-Term Support
Ether is now trading near critical long-term support levels last seen in October 2023 and April 2025.
This has raised concerns among traders, especially as ETH continues to struggle with weaker momentum and reduced market confidence. The drop below key levels has placed Ethereum under renewed pressure as investors watch whether buyers can defend the current price zone.
Alvin Kan, chief operating officer of Bitget Wallet, described the flip as a notable milestone that shows the growing dominance of stablecoins in the crypto ecosystem.
He said the move reflects strong demand for liquid on-ramps and off-ramps during volatile market conditions. At the same time, it also sends a clear message that Ethereum must continue building stronger utility and narrative momentum to maintain its position among the largest crypto assets.
Kan added that deeper stablecoin liquidity can still be positive for the broader market, as it supports higher trading volumes, better market access, and more ecosystem innovation.
Ethereum Faces Internal Changes
Ethereum’s recent price weakness comes as the ecosystem also faces internal changes.
The Ethereum Foundation recently reduced its workforce by 20%, following several executive departures and a broader restructuring process. These changes have added to market attention around Ethereum’s long-term direction and leadership structure.
However, the ecosystem also saw a new development this week with the launch of Ethlabs, a nonprofit organization created by key Ethereum Foundation developers and researchers.
Ethlabs is backed by Ether treasury firms Bitmine and Sharplink, adding a new layer of support at a time when Ethereum’s market position is being tested.
Not Everyone Is Bearish on Ether
Despite the sharp ETH decline, some investors are using the pullback as a buying opportunity.
Ether treasury company Sharplink bought the dip, making its first purchase in eight months by acquiring 5,000 ETH on Thursday.
Bitmine, chaired by Tom Lee, has also continued accumulating Ether at lower prices. The company added another 76,881 ETH last week, showing that some institutional players still see long-term value in Ethereum despite short-term weakness.
USDC Also Flips XRP by Market Cap
The stablecoin trend was not limited to Tether.
Circle’s USDC also overtook Ripple’s XRP by market capitalization as XRP fell back toward $1, its lowest level since November 2024.
XRP’s market capitalization dropped to around $64 billion, while USDC stood at approximately $73.6 billion.
The double flip by USDT and USDC shows how stablecoins are becoming increasingly dominant in the crypto market as traders look for safety, liquidity, and reliable dollar exposure during periods of uncertainty.
Why This Matters for the Crypto Market
Tether flipping Ether is more than just a ranking change. It signals a broader shift in market behavior.
Investors are currently prioritizing stablecoin liquidity, capital protection, and flexible trading access over exposure to volatile crypto assets like ETH. At the same time, Ethereum remains one of the most important networks in crypto, but the latest move shows that it must continue proving its value through adoption, utility, and ecosystem growth.
For now, the market’s message is clear: stablecoins are no longer just a side product of crypto. They are one of its strongest and fastest-growing sectors.
