Tether’s USDT has drawn level with ether, narrowing the gap for the second-largest cryptocurrency by market capitalization to a fraction of a percent. The stablecoin briefly overtook ether earlier this month, the first time a dollar-pegged token has done so.

USDT carried a market cap of about $186.1 billion on Friday, against ether’s roughly $188.9 billion, per CoinGecko. The two assets sit fractions of a point apart in the broader market: ether holds 8.77% of total crypto value and USDT 8.64%, per CoinGecko’s global readout. Bloomberg reported that USDT edged past ether in value for a few hours over a weekend earlier in June, the closest a stablecoin has come to the No. 2 position in crypto.

Rising Supply

The crossover tracks two moves running in opposite directions. USDT supply has expanded toward record territory, with circulating tokens near 186.3 billion, per CoinGecko. Issuance has roughly doubled over the past two years as exchanges, payment firms and offshore dollar demand absorbed new tokens.

Ether has fallen about 24% over the past 30 days to around $1,566, per CoinGecko. One asset is being minted into circulation as the other reprices lower.

Stablecoin Lead

USDT remains the dominant dollar token by a wide margin. Its circulating supply of about $184.9 billion is more than double USD Coin’s $73.7 billion, the second-largest stablecoin, per DefiLlama. Tether’s token accounts for the bulk of the roughly $280 billion stablecoin market.

The proximity to ether reflects how large the stablecoin category has grown against the base assets of the chains it settles on. USDT issues and redeems against fiat reserves and tracks dollar demand rather than speculative flows, which leaves its market cap to climb on net inflows even as risk assets sell off.

Whether USDT holds or retakes the spot depends on ether’s price path. Ether is down about 8% over the past week, per CoinGecko, and a further decline of a few percent would draw the two assets level again. The Defiant has tracked the broader stablecoin supply surge and Tether’s expanding USDT footprint in recent weeks.