The number of bets is increasing in the market that ether could lose its position as the second-largest cryptocurrency by market capitalization in 2026. However, the main candidate to surpass ETH is not another altcoin, but the stablecoin Tether.
On Polymarket, the chances of ETH losing its second place have increased from 17% to over 59%.
The main threat to Ethereum's position is the rising Tether.
Despite the price weakness, the fundamentals of the network itself still look relatively good.
Pressure on ether is increasing.
Ethereum has been struggling to maintain its former market dominance for some time now. Although the network still plays a key role in stablecoins, DeFi, and tokenization, the ETH price itself is not keeping up with investors' expectations.
Over the past five years, the capitalization of ether has grown relatively modestly, while USDT has grown many times more during the same period. The effect is that Tether is increasingly approaching Ethereum in terms of size.
That is why more and more users on Polymarket are betting that ETH may drop to third place in the capitalization ranking by 2026. Earlier this year, such a scenario seemed niche. Today, the probability assessed by the market is clearly higher.
This is not just an Ethereum problem, but a problem for the entire market environment.
The weakness of ETH does not result solely from the problems of the network itself. Macroeconomics also plays a significant role here. The cryptocurrency market remains under pressure from high interest rates, geopolitical tensions, and capital outflows from riskier assets.
This can also be seen in the spot ETF market for ethereum. The value of this segment has clearly fallen compared to last year's peaks, showing that institutional demand is not providing ETH with sufficiently strong support today.
At the same time, stablecoins — and particularly Tether — benefit from this environment. When investors fear further downturns, they often flee into assets with stable prices. This automatically strengthens the position of USDT.
The fate of ETH is not yet sealed.
Despite all this, it cannot be said that Ethereum has already been definitively pushed into defense. The network itself is still developing, and the technological foundations remain solid.
Moreover, the cryptocurrency market is today exceptionally dependent on macro situations and geopolitics. Even the mere announcement of a pause in hostilities in the Middle East triggered a strong rebound in digital asset prices. If a real de-escalation were to occur, ether could once again receive a strong upward impulse.
Therefore, the question today is not: has Ethereum already lost? More: can it return to the game before Tether takes full advantage of the current market weakness.