An analysis found that concentration in the stablecoin market becomes more pronounced as the market-cap threshold rises, sharply reducing the number of tokens that survive.

On Sept. 11, CoinPost reported that Lorenzo Valente (로렌초 발렌테), research director for digital assets at Ark Invest, released a chart tallying the distribution of stablecoin market capitalisation and said the market becomes more concentrated in a small number of tokens in the top tiers.

Valente defined stablecoins as assets that become more advantageous at larger scale. He said a network effect is at work in which the number of surviving tokens rapidly declines as the market-cap threshold rises. Only two issuers, Tether and Circle, currently have stablecoins exceeding $10 billion, and similar concentration could continue at the next stages of the $100 billion and $500 billion tiers, according to the analysis.

Recent market size also aligns with this trend. Based on DeFiLlama data cited in the article, Tether’s market capitalisation is about $183.4 billion, and Circle-issued USDC is about $74.5 billion. The next-largest stablecoins remain in the $6 billion range, broadly matching the view that the market above $10 billion has effectively been reshaped into a two-token system.

Valente said the segment above $10 billion had at one point expanded to as many as four tokens around 2022, but departures followed. Only Tether and Circle remain now. That suggests entry into the top ranks is becoming increasingly difficult.

Growth was limited in the tier below that as well. Ark Invest’s chart showed the number of stablecoins above $1 billion was in the single digits in 2021, but it only increased to around 12 by 2026. That amounts to a modest rise over nearly five years. Valente said the structure shows that the higher the club, the harder it is for new entrants to break in.

Liquidity and connectivity were cited as factors behind the trend. Stablecoins tend to benefit from larger scale in areas such as the number of exchange and DeFi protocol integrations, liquidity depth and a track record of regulatory responses. As a result, tokens with larger market capitalisation draw more use cases and funding, while latecomers face greater difficulty building networks at the same level.

Valente also projected further concentration in future competition. He said only Tether has reached the $100 billion tier so far, but in the long run Circle could join it, forming a competitive structure between the two companies. He added that this view was presented outside the tally range of the published chart.

For the $500 billion tier, he suggested Tether’s lead could last longer. Valente said the $500 billion level could remain a Tether-dominant structure for the time being, and he also mentioned the possibility that this could continue for more than two years. He judged it would not be easy for stablecoins other than Tether and Circle to reach that scale in the short term.

These projections are seen as an indicator of whether the stablecoin market has moved beyond a phase of simply increasing the number of tokens and into a phase of restructuring around large issuers. The key points to watch are how large a gap Tether and Circle create in the segment above $100 billion and whether latecomers can break through the $10 billion threshold.