Could Binance’s Support Shake Tether’s Lead? Analysts Explain USDC’s Hurdle
Binance’s investment in Circle could help USDC reach more users. But analysts say the liquidity and payments network Tether has built over the years makes it difficult for leadership to change hands quickly.
Analysts speaking to CoinDesk assessed how Binance’s $100 million investment in Circle shares and its five-year agreement to expand USDC’s use on the platform could affect competition. The focus of the latest assessments is less on the investment announcement itself than on how much Binance’s distribution power could narrow the gap between USDC and USDT.
What Changed at Binance After the First Partnership?
According to Kaiko data, the number of spot trading markets priced in USDC on Binance rose from 140 to 329 since the first partnership was announced in December 2024. Monthly USDC trading volume also rose regularly to more than $80 billion, up from a range of $20–40 billion before the partnership.
These figures show growth during the previous partnership, not the realized impact of the latest equity investment. According to Kaiko’s assessment, USDC trading on other major exchanges generally remained within its previous ranges, while Binance drove a significant portion of the increase.
Clear Street analyst Owen Lau said the investment further aligned Binance’s and Circle’s interests. Binance can now benefit from Circle’s growth as a shareholder, while Circle can expand USDC’s reach through the exchange’s user base.
USDT’s Advantage Is About More Than Its Size
According to figures in the report, USDC’s market capitalization is approximately $74 billion, while Tether’s USDT has a market capitalization of approximately $140 billion. Analysts believe Binance’s support could increase competitive pressure on USDT, particularly in global trading and emerging markets.
However, Martins Benkitis, co-founder and CEO of Gravity Team, stressed that reaching more users alone would not shift the balance overnight. USDT’s established trading pairs, liquidity in local markets, and people’s familiarity with using it are among the hurdles its competitors must overcome.
For that reason, although the Binance agreement is seen as a growth opportunity for USDC, analysts are not saying that Tether’s leadership will end anytime soon. The key question is whether broader distribution will translate into lasting usage and market share.