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Ahmed Barakat
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For a few hours, earlier this week, Tether USDT stablecoin held a higher market cap than Ethereum, the first time that has happened in eight years. Data across multiple trackers placed both assets in the $183–188B range during the crossover window, with one snapshot showing USDT at $187B against ETH at $186B, a spread of under $1B.
The flip lasted hours, and ETH reclaimed second place once the price stabilized. The mechanism that produced the crossover, steady USDT supply expansion meeting sustained ETH price weakness, did not disappear when the ranking reversed.
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Crypto Market Structure: Tether USDT Flippening
This was not a supply shock on Ethereum’s side. What compressed ETH’s market cap was price, and what expanded USDT’s was issuance. Tether own Q4 2025 attestation showed USDT at a record $187.3B, having added $12.4B in a single quarter even as the crypto market was catching a falling knife.
By early 2026, USDT’s market cap had climbed from $144.2B to $184B in twelve months, 28% growth, while ETH’s dollar valuation moved in the opposite direction.
In the three weeks leading into the crossover, more than $7B exited the stablecoin sector while $400B was wiped from the total crypto market cap. Ethereum’s DeFi TVL slid to around $36B. Traders were not abandoning stablecoins; they were parking liquidity while shedding volatile assets.
USDT’s share of the total stablecoin sector sits at 59%, with USDT and USDC together accounting for 82%, which means Tether is not a peripheral player in this dynamic.
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Mike McGlone’s Warning: It Doesn’t Stop at Ethereum
Bloomberg Intelligence senior commodity strategist Mike McGlone has been tracking this trajectory longer than most. In October 2020, McGlone wrote that USDT, then at $16B against ETH’s $43B, was “on pace to match the market capitalization of Ethereum in a bit less than a year,” describing it as part of an “inexorable trend” toward stablecoins gaining mainstream footholds.
McGlone’s updated thesis goes further. He expects “the flippening to continue,” with Tether’s market cap topping Ethereum in 2026 and “eventually Bitcoin.” The extreme scenario he outlines: if Bitcoin falls toward $10,000, USDT, which would need to grow 7x from current levels, could eventually challenge BTC for the top spot.
We are not endorsing the $10,000 BTC scenario here. But dismissing it entirely because it sounds extreme is how people missed the USDT-flips-ETH call in the first place.
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ETH and USDT Now: The Gap, the Recovery, and What Comes Next
As of today, Ethereum has reclaimed the second position in market cap rankings, but the margin is not comfortable. ETH would need to sustain meaningful price recovery, or Tether USDT issuance would need to plateau for the second place to feel secure again.
Neither is guaranteed. Structural improvements in Ethereum’s tech stack, including ZK-proof scaling developments, offer a longer-term bullish counterpoint, but those catalysts operate on a different timeframe than the near-term price weakness that enabled the June flip.
USDT’s supply trajectory shows no sign of reversal. Tether added $12.4B in a single quarter during a down market. In a neutral or risk-on environment, that pace could accelerate. At $1 peg, market cap and circulating supply are essentially the same number, so every new USDT minted is a direct market cap increment, without the price volatility that governs ETH’s ranking.
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