Tether stablecoin USDt became the second-largest cryptocurrency by market capitalization as Ether fell to its lowest price of the year on Friday

Ether’s market capitalization fell below $185 billion after its price dropped 5.2% in 24 hours, sending the asset’s value down to $1,510 on Coinbase. According to to TradingView. This allowed USDt, with a market capitalization of $186 billion, to surpass the cryptocurrency.

“[The] The overtaking of stablecoins really shows how the market still favors stability over ETH volatility at the moment,” Andri Fauzan Adziima, research manager at Bitrue Research Institute, told Cointelegraph.

This development reflects the accelerating growth of stablecoins, which now account for almost 15% of the entire cryptocurrency market capitalization. Stablecoin supply fell by over 30% during the last bear market, but this time it has reached record levels, he wrote 21Shares on Thursday, adding:

“For us, this is the strongest evidence yet that stablecoins are one of the defining use cases for cryptocurrencies – demand that is no longer cycle-dependent.”

USDt changed the market capitalization of ETH. Source: CoinGecko

Alvin Kan, COO of Bitget Wallet, told Cointelegraph that the flip is a “significant milestone that underscores the explosive growth and dominance of stablecoins in today’s cryptocurrency ecosystem.”

“It demonstrates the strong demand for reliable, smooth climbing and descending during periods of volatility, while reminding us that ETH must continue to provide compelling utility and narrative momentum to maintain its position.”

Kan said the development is positive for the broader market as deeper stablecoin liquidity supports higher transaction volumes and ecosystem innovation.

Related: Sharplink is buying ETH after an 8-month hiatus as the token hit a 2026 low

ETH prices have returned to key support levels last seen in October 2023 and April 2025.

The Ethereum ecosystem has also recently undergone internal changes with several executive departures and a 20% headcount reduction at the Ethereum Foundation.

This week, however, key EF developers and researchers launched a new nonprofit called Ethlabs, with support from Ether vaults Bitmine and Sharplink.

ETH prices are at a critical long-term support level. Source: TradingView

Not everyone is bearish

Some took the fall of Ether as an opportunity.

Ether Treasury company Sharplink bought into the dip with its first purchase in eight months, raising 5,000 ETH on Thursday. Bitmine, chaired by Tom Lee, is also accumulating at these low prices, adding another 76,881 ETH last week.

Meanwhile, Circle USDC (USDC) also changed Ripple’s XRP (XRP) market cap as XRP fell back to $1, its lowest level since November 2024, leaving XRP with a market cap of $64 billion compared to USDC’s $73.6 billion.

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