According to Polymarket bettors, Ethereum (ETH) could be on the verge of losing its long-held status as the second-largest cryptocurrency by market capitalization.
The latest data shows a 57% probability that the flagship altcoin will be "flipped" and lose its number two ranking by the end of the year.
Just two months ago, in January, for comparison, the odds of Ethereum losing its spot sat at a mere 14%.
Currently, the stablecoin giant Tether (USDT) is the undisputed main candidate poised to overtake the smart contract platform.
Ethereum's number two spot
Ethereum has never successfully surpassed Bitcoin, but it came remarkably close during the ICO boom of 2017. In June 2017, Ethereum's market capitalization surged to represent approximately 30% of the entire cryptocurrency market, while Bitcoin's dominance briefly plummeted below 40%. At its peak, Ethereum's total value hovered around 80% to 83% of Bitcoin's, sparking immense "flippening" hype that ultimately faded.
Ethereum has maintained a near-ironclad grip on the second-largest market capitalization for most of its existence since launching in 2015. However, it has faced some challenges.
It has actually slipped below second place on a few rare occasions. During the massive altcoin volatility of 2018, XRP, the Ripple-affiliated token, briefly overtook Ethereum in market capitalization multiple times.
XRP first pushed Ethereum down to third place in early January 2018, and then repeated the feat later that year.
Looming USDT threat
The current threat comes from the mushrooming growth of the Tether (USDT) cryptocurrency.
The fiat-pegged stablecoin has ballooned to a massive $184.0 billion valuation.
A scenario where liquidity and stability outrank decentralized computation might end up materializing this year (especially if the current bear market continues to persist).
Dan Burgin
Vladislav Sopov
