Ether’s (ETH) hold on the second spot in the cryptocurrency market is waning, not because it’s getting any closer to overtaking Bitcoin (BTC), but because the stablecoin economy is booming.
Key conclusions: :
Second place in the Ethereum ranking at risk in 2026
Over the past five years, Ether has significantly underperformed its top competitors at number one. Second place, mainly stablecoin Tethera USDT (USDT).
On a five-year basis, ETH’s market capitalization increased by approximately 11.75% to approximately $240 billion.
In comparison, USDT, the third largest cryptocurrency, grew by 622.50% during the same period, and its market capitalization reached over $184 billion. Even XRP (XRP) and USD Coin (USDC) outperformed Ether.
As a result, more and more traders are betting on Ethereum’s return in 2026.
For example, on the Polymarket betting platform, over 59% of players placed bets betting in favor of Ether losing second place in 2026. At the beginning of the year, these chances were only 17%.
Why is Ethereum lagging behind Tether?
Ethereum and Tether develop differently because one is a cryptocurrency and the other is a fiat.
Ethereum’s market value depends largely on ETH price growth and was tough to sustain in 2026 as cryptocurrency markets came under pressure from macroeconomic factors such as US tariffs, the US and Israel’s war with Iran, and dwindling expectations for Federal Reserve interest rate cuts.
This weakness was also reflected in institutional demand. Across U.S. spot Ethereum ETFs, assets under management fell by about 65% to $11.76 billion in March from $31.86 billion in October last year, underscoring the decline in appetite for ETH over the past few months.
Tether, on the other hand, grows as capital flows into stablecoins and investors buy “crypto dollars.” This usually happens when investors want security, liquidity, or flexibility instead of exposure to volatile assets like ETH.
Related: Artificial intelligence and stablecoins are winning despite the cryptocurrency market crash in 2026
The total stablecoin market is now worth $310 billion, up from around $5 billion in 2020, with Tether’s share at 58%.
Demand for this type of “dry powder,” capital accumulated in dollar-linked assets while investors wait for better entry points into the cryptocurrency market, tends to remain steady during risk-off periods.
Ethereum needs more risk appetite to drive up the price of ETH, while Tether gains when investors go on the defensive. This helps explain why ETH’s market capitalization growth has lagged behind USDT, despite remaining one of the core crypto infrastructure assets.
Can the ETH price drop further in 2026?
From a technical perspective, Ether is at risk of further price declines in 2026.
Since Sunday, quotations have been within what resembles a “bear flag” formation, which increases the chances of a breakout given the price break well below the lower trend line of the structure.
There is a risk that the ETH price will decline towards the flag-measured downside target of around $1,250 by June if the break below the lower trendline continues.
