Tether’s USDT Reaches 109 Million Wallets: Dominated by Small Retail Users

TLDR:

• Tether (USDT) now has 109 million on-chain wallets, approaching Ethereum’s user base
• Over 86 million USDT accounts are linked to centralized platforms
• Small retail users dominate with 50.2 million wallets holding under $1,000
• USDT maintains 97.5% market share across 25 blockchains
• Emerging markets drive significant adoption through centralized exchanges

A new report from Tether reveals that its USDT stablecoin has reached 109 million on-chain wallets at the start of Q4 2024, marking a major milestone in digital asset adoption. The stablecoin’s wallet count now rivals Ethereum’s user base and exceeds Bitcoin’s numbers.

The data shows that centralized platforms play a crucial role in USDT’s ecosystem, with over 86 million accounts receiving on-chain deposits. These platforms recorded 4.5 billion visits in the first three quarters of 2024, with emerging markets accounting for nearly half of all traffic.

Breaking down the wallet distributions reveals a clear pattern of retail user dominance. About 18.7 million accounts hold less than $1 in USDT, while 31.5 million wallets contain between $1 and $1,000. This concentration of smaller balances demonstrates USDT’s widespread use among everyday users.

A notable trend emerged in user behavior, with approximately 30% of smaller wallets showing periodic reactivation. This pattern suggests users return to USDT as a financial tool when funds become available, indicating its role as a practical currency alternative.

The larger wallet segment, though smaller in number, remains substantial. Just over one million wallets maintain balances exceeding $1,000, with most of these accounts holding between $1,000 and $10,000.

Tether’s Head of Economics, Philip Gradwell, emphasized that the high number of low-balance wallets demonstrates USDT’s accessibility. “The prevalence of low-balance wallets is a feature, not a bug, highlighting USDT’s accessibility to users who might otherwise be unbanked,” he stated.

USDT’s reach extends across 25 different blockchains, where it maintains a commanding 97.5% share of the total stablecoin supply. This broad blockchain presence surpasses competitor stablecoins by nearly four times.

The growth in USDT wallets reflects changing user preferences following market events. The collapse of FTX prompted many users to move toward self-custody solutions. Even during periods of market stress affecting other stablecoins like USDC, USDT maintained its position.

In emerging markets, USDT serves multiple purposes beyond simple transactions. Users frequently employ the stablecoin for savings and as a way to work around local financial restrictions. Many users conduct their entire range of activities – from purchasing to holding and sending – within centralized platform ecosystems.

The data indicates that centralized exchanges continue to serve as primary access points for USDT users. These platforms facilitate easy entry into the crypto ecosystem, particularly for users in regions with limited traditional banking options.

USDT’s wallet growth showcases the stablecoin’s evolution from a trading tool to a widely used digital currency. The high number of small balance holders suggests USDT fills a vital role in providing basic financial services to users worldwide.

The distribution of wallet sizes reveals the democratic nature of USDT adoption. While major holders exist, the vast majority of users maintain modest balances, indicating widespread grassroots adoption rather than concentration among wealthy users.

Recent market events have tested but ultimately reinforced USDT’s position. Despite challenges faced by other stablecoins, USDT has maintained its market dominance and user trust.

Current trends suggest continued growth in USDT adoption, particularly in regions where traditional financial services may be limited or unreliable. The stablecoin’s ability to serve both small retail users and larger holders positions it uniquely in the digital asset landscape.