The stablecoin market has seen remarkable activity in recent weeks, with total supply soaring past $300 billion. Despite this headline growth, the industry’s overall expansion has slowed down significantly. Data from the previous month reveals that while USDT has surged, several of its rival stablecoins have seen pronounced declines.
USDT drives limited market growth
USDT made the biggest impression in May, posting a $5 billion increase. Across the entire stablecoin market, net growth amounted to just $0.9 billion—or a mere 0.3 percent. This finding points to the fact that the stablecoin sector’s growth last month was almost entirely driven by USDT alone.
USDT’s rise managed to offset losses recorded by multiple other stablecoins. Combined, USDC, USDe, and PYUSD shrank by $4.2 billion over the same period. Without the expansion in USDT, the market would have actually contracted.
A recent report highlighted that most new capital entering the stablecoin market concentrated in USDT, while overall growth remained subdued. This signals that instead of broad-based gains, stablecoin momentum is now largely clustered around a single asset.
As a result, although the aggregate stablecoin market is struggling to attract fresh investment, most of the demand is now converging on USDT.
Rivals see sharp declines
The most striking drop came from USDe, developed by Ethena, which saw its monthly supply plummet by 28 percent. Since the start of the year, USDe has shrunk by nearly 34 percent. This decline has been attributed mainly to lower funding rates in the perpetual futures market, which diminished returns from interest-based strategies reliant on those rates.
A similar trend emerged for PayPal’s PYUSD, which contracted by 13 percent in May. Although detailed data for USDC was not provided, broader market figures indicate that its total supply decreased as well.
Quick Glossary: Perpetual futures are derivatives without a set expiration date and can run indefinitely. In crypto markets, funding rates maintain a balance between buyers and sellers and are a key source of yield for certain investment strategies.
Altogether, these shifts have created a turbulent landscape in the stablecoin sector. With the main players losing ground, USDT almost single-handedly fueled what little market growth was achieved.
Few newcomers drew capital inflows
Not all stablecoins suffered losses, however. Smaller tokens such as USDS and USD1 saw some capital inflows and managed to stand out, though the amounts involved were not disclosed and lacked notable impact compared to major stablecoins.
Still, USDT’s extra $5 billion in supply more than accounted for the net growth in the market during the month, mitigating deficits elsewhere. Losses from other top stablecoins, meanwhile, limited total market advancement.
Current data makes it clear that growth across the stablecoin sector remains tightly constrained, with most of the moves stemming from internal shifts in assets and more users opting for USDT.
| Stablecoin | Monthly Supply Change | Year-to-Date Change (%) |
|---|---|---|
| USDT | +$5 billion USD | Not disclosed |
| USDe | -28% | -34% |
| PYUSD | -13% | Not disclosed |
| USDC | Figure not provided; net decrease | Not disclosed |
