Tether Asserts Stablecoin Dominance Over Circle's USDC Amid Major Crypto Hacks

In brief

• Growth in USDT’s market cap has outpaced USDC’s since Drift Protocol was exploited for $285 million this month.
• If USDC holders begin off-ramping the stablecoin or move it to exchanges, Compass Point analysts foresee lower profits for both Circle and Coinbase.
• Nansen analyst Jake Kennis posited to Decrypt that Tether’s stablecoin likely offers superior liquidity during DeFi crises.

Tether’s dominance over Circle has been rising since Solana-based Drift Protocol was exploited for $285 million this month, with decentralized finance users appearing to propel USDT’s market cap to an all-time high on Tuesday following another major hack.

Since attackers linked to North Korea pulled off one of DeFi’s largest hacks this year, USDT’s market cap has grown 2.1% to nearly $188 billion, according to CoinGecko. Meanwhile, USDC's total value has increased at a slower pace, rising 1.4% to $78.25 billion.

In a Tuesday note, analysts at investment bank Compass Point wagered that DeFi outflows have the potential to pressure USDC’s on-chain circulation, a dynamic that would reduce gains derived from the stablecoin’s backing, namely U.S. Treasuries, for Coinbase and Circle.

188B USDT (ATH)

— Paolo Ardoino 🤖 (@paoloardoino) April 21, 2026

“DeFi outflows may result in users offramping USDC or holding USDC on exchanges with yield sharing arrangements,” they wrote. “Either outcome will put pressure on CRCL and COIN's gross profit, via lower interest revenue or lower margins.”

The analysts’ assessment is partly based on the fact that investors “quickly withdrew” $1.5 billion in stablecoins from lending protocol Aave after attackers funds related to protocol Kelp DAO, and used them to borrow funds from Aave’s platform.