Tether’s USDT stablecoin reaches a $100 billion market cap, outpacing rivals and highlighting significant growth and market dominance.
Tether’s USDT stablecoin has soared to a $100 billion market capitalization, marking a significant achievement in the cryptocurrency sector. This leap positions Tether as the most substantial stablecoin by market cap, outpacing its competitors and showcasing a robust 9% growth since the year’s start. The surge not only highlights Tether’s growing dominance but also underscores the expanding gap with its closest competitor, USD Coin (USDC), which maintains a market cap of $1.00.
On March 4, Tether’s USDT briefly achieved this historic market cap milestone. This fluctuation in market capitalization reflects the dynamic nature of the cryptocurrency market, reliant on both current prices and circulating supply data, as reported by CoinGecko. Despite this achievement, other platforms like CoinMarketCap have yet to acknowledge Tether’s new benchmark.
The Impact and Future of Tether’s Growth
Tether’s remarkable market cap is now comparable to global giants such as the British oil and gas titan BP and surpasses that of e-commerce powerhouse Shopify. Tether operates across 14 blockchains and protocols, offering a dollar-pegged cryptocurrency that serves as a stable trading asset for crypto traders. Positioned as the third-largest cryptocurrency, following Ether, Tether plays a crucial role in the blockchain ecosystem.
The recent crypto market revival has seen the overall market cap exceed $2 trillion, with Bitcoin experiencing a significant 50% price surge, reaching two-year highs. Tether’s issuer claims each USDT token is backed on a 1:1 basis with reserves, predominantly consisting of yield-bearing U.S. Treasury Bills. This backing asserts Tether’s commitment to stability and security within the volatile crypto market.
Despite facing scrutiny over the quality of its asset backing, Tether has embarked on efforts to mitigate exposure to higher-risk assets. The company’s financial strategies, including a pledge to cease lending from its reserves—a pledge that remains unfulfilled as of the end of 2023—demonstrate a complex balance between growth and risk management. With $4.8 billion in loans still on its books by year-end, Tether aims to reduce this to zero by 2024, ensuring that all loans are fully collateralized.
Tether’s dominance in the stablecoin market also comes from in its usage on the Tron blockchain, favored for transactions in Southeast Asia. Despite criticisms and concerns raised in a United Nations report regarding cyber fraud and money laundering, Tether defends its operations, highlighting collaborations with law enforcement and the traceability of its tokens.