Tether’s USDT briefly moved ahead of Ethereum in fully diluted valuation (FDV) after ETH dropped to its lowest price level of 2026.
The short-lived flip highlighted a major trend in the crypto market right now: investors are showing a stronger preference for stablecoins while major cryptocurrencies continue to face pressure.
Market data showed USDT reaching a fully diluted valuation of around $191.5 billion, slightly higher than Ethereum’s estimated $189.3 billion. Although Ethereum later regained its position, the moment showed just how close the two assets have become during the current market downturn.
The change happened as ETH fell more than 5% in 24 hours. Ethereum was trading near support levels not seen since October 2023 and April 2025. Meanwhile, USDT remained stable around $1, as expected from a dollar-backed stablecoin.
The event reflects a broader shift happening across the crypto industry. While the prices of many cryptocurrencies have struggled, stablecoins continue to grow. According to a recent market report from 21Shares, stablecoins dropped more than 30% during the previous bear market. This time, however, they are reaching new all-time highs.
That difference is important. Stablecoins are widely used for trading, payments, and moving money across crypto platforms. Their continued growth suggests that users are not leaving the crypto ecosystem altogether. Instead, many are moving funds into dollar-backed assets and waiting for better market conditions.
Tether has also been expanding beyond its traditional role as a trading asset. Recently, Tether-backed payment company Oobit brought USDT payments to Brazil’s Pix network, giving users another way to spend and transfer digital dollars through everyday payment systems.
At the same time, Ethereum is dealing with both market challenges and internal changes.
ETH has struggled to hold key support levels as investors closely watch ETF activity, treasury purchases, and ongoing discussions about the network’s future direction.
Adding to the uncertainty, the Ethereum Foundation recently announced a restructuring that reduced its workforce by around 20%, resulting in the removal of 54 positions. The move raised new questions about the foundation’s long-term development strategy during a period of weak ETH performance.
The Ethereum ecosystem is also evolving in other ways. A new nonprofit research group called Ethlabs has been launched with backing from Joe Lubin, BitMine, and SharpLink. The organization includes former Ethereum Foundation researchers and will focus on improving transaction settlement, network scalability, asset issuance, and cross-chain standards.
Despite the recent weakness, some large institutional investors continue to accumulate Ethereum.
SharpLink recently purchased 5,000 ETH after an eight-month pause, taking advantage of lower prices. The company now holds more than 876,000 ETH, including staking rewards.
BitMine has taken an even larger position. The company, led by Tom Lee, has staked about 86% of its Ethereum holdings, bringing its total staked ETH to roughly 4.88 million coins. That makes it one of the largest public Ethereum treasury holders in the market.
These purchases show that some institutions still see Ethereum as a valuable long-term asset. However, USDT briefly overtaking ETH by fully diluted valuation tells another story. Right now, many traders are prioritizing stability and dollar liquidity while Ethereum works to regain momentum and defend key price levels.
