USDT, USDC dominance rises again — Traders prefer dollars to BTC

Market participants in crypto have shown renewed preference for dollar-pegged stablecoins, with USDT and USDC gaining share as traders seek liquidity and capital preservation. CoinDesk’s daybook for May 27, 2026, notes defensive positioning among short-term investors who are rotating out of risk assets into dollar tokens.

The shift is reflected in stablecoin market metrics and episodic flows: reports indicate the stablecoin sector reached fresh highs in circulating supply and market cap, with Tether and USD Coin accounting for the bulk of the increase. At the same time, bitcoin traded around the mid-$70,000s and saw volatility linked to large block trades and ETF activity, which amplified demand for stablecoin liquidity.

Those flows have translated into short-term pressure on bitcoin prices and higher settlement volumes in USDT/USDC pairs. Market updates from CoinDesk show BTC hovering near key technical levels while spot bitcoin ETF movements and reported outflows have reinforced the move into dollar-denominated stable instruments.

In a broader economic context, the dominance of the U.S. dollar in global finance and the role of dollar-linked digital tokens are driving structural demand for stablecoins. Bloomberg coverage highlights how dollar dominance affects regional crypto ambitions, and IMF research underscores concerns about stablecoin reserves and regulatory frameworks — both themes that shape investor confidence in holding dollar tokens.

Analysts expect the near-term landscape to be governed by ETF flow dynamics, reserve disclosures from issuers, and macro risk sentiment. If risk appetite recovers, capital may rotate back into bitcoin and altcoins; if uncertainties persist, stablecoins could retain elevated market share as a liquidity and settlement medium. Market participants will be watching ETF volumes and on-chain stablecoin movements for signals of the next directional shift.