Tether (USDT), a token that’s backed by the U.S. dollar, is one of the most popular stablecoins in the cryptocurrency industry. While it has been the most favorite stable token for many crypto traders, things appear to be changing, as other rival stablecoins enter the market and seem to be doing really well.

Tether, which is pegged to $1 in bank deposits, hasn’t been doing well lately. Since early October, the coin has not traded at the expected $1, and had in fact plunged to a low of $0.85 on October 15.

Rival Stablecoins Enter the Market

Taking advantage of Tether woes, other rival stable coins have entered the market, looking to dethrone, which has held the top position for long. Since September we have witnessed four stablecoins make their way into the cryptomarket, joining the older rivals which include Marker’s Dai (DAI) and TrueUSD (TUSD). The new entrants are Gemini Dollar (GUSD), Paxos Standard Token (PAX), Circle’s USD Coin (USDC).

With some people choosing to go with other stablecoins, Tether has started losing its market share, but it still remains firmly at the top, according to data analyzed by CoinDesk.

Indicators that Show Rival Stablecoins are Making Significant Inroads

Stablecoins are very popular in the cryptocurrency ecosystem. In theory, they allow crypto traders to move funds between exchanges easily and quickly, without relying on traditional banking system. Better still; stablecoins are used to move funds into less risky (stable) digital assets when volatility is high.

In order to determine how stablecoins are doing in the market, CoinDesk used three Metrics, stating that none of them are perfect metrics. Here are its findings:

1.     Market Capitalization

According to data collected, the market capitalization (a figure determined from multiplying the total supply of a coin by its price) of Tether has declined steadily, which has been largely caused by the reduction in the supply of there. In mid-October, the price of Tether dropped below $0.93, something that was blamed to Bitfinex action to send 780 million USDT to Tether Treasury, a firm-controlled wallet, on October 14.

This reduction of the supply of Tether didn’t, however, benefit its rival stablecoins, but there was a number of traders who opted to use other tokens such as BTC and fiat to minimize their risk of loss.

2.     Trade Volume

CoinDesk also used trading volume to analyze the stablecoin market, looking at the top exchanges and how much in stablecoins is being traded. It determined that, following the plunging of tether prices, some exchanges such as Huobi and OKEx made a crucial decision to list alternatives to Tether.

This was good news for Tether’s stablecoins, as a number of them showed a slight increase in their trading volume in October. However, some a good number of traders still went for Tether, albeit risky, because they are already accustomed to it.

3.     Transaction Volume on Blockchains

When it comes to the transaction volume on blockchains, Tether’s alternatives did well throughout October, as they recorded considerably high transactions and seems to have shot up following Tether’s reduction in prices.

Conclusion

Although Tether’s rivals are making considerable inroads into the stablecoin market, it’s worth to mention that Tether is still the king, and dominates the stablecoin market share. However, competition from its alternatives is tough and appears to be heating up, and we could soon see any of the rivals closing the space to catch up with tether.