Tether, the stablecoin pegged to the US dollar, has solidified its dominance in the cryptocurrency market with a significant increase in market capitalization. Its capitalization has jumped by $5.25 billion, surpassing the approximately $4 billion generated by spot Bitcoin ETF products.
In a recent YouTube video by Crypto News Flash, it was revealed that Tether (USDT) has exceeded a market valuation and circulation of $100 billion, making it the first stablecoin to achieve this milestone. This growth can be attributed to the increased demand for Bitcoin, which was trading at over $64,000.
According to the latest data from MarketCap, USDT’s market capitalization now stands at over $104 billion. This represents an increase from around $98.65 billion at the beginning of the month, with a consistent upward trend that was masked by a brief consolidation period.
The addition of $5.25 billion to USDT’s market capitalization is significant as it enhances overall market liquidity. This liquidity is crucial in meeting the demands of Bitcoin and other altcoins. In fact, the liquidity of USDT surpasses the inflow of the combined spot Bitcoin ETF market, indicating that there is enough stablecoin to support the accumulation of Bitcoin and other cryptocurrencies on exchanges.
It is important to note that Bitcoin is highly responsive to large inflows or outflows of capital. When a substantial amount of capital enters the market, Bitcoin often experiences an upward price momentum due to increased demand. Therefore, Tether’s $5.25 billion investment could potentially drive Bitcoin’s price up in the near to mid-term. However, it is important to acknowledge that this does not guarantee sustained growth or protection against market corrections.
Tether currently dominates the stablecoin industry, accounting for over 70% of the $142 billion market. Circle’s USDC comes in second with a 19.4% market share. Despite its success, Tether has faced criticism regarding its transparency and reserves. In 2021, the company settled a complaint with US regulators and paid over $40 million for providing false representations about its collateral.
Furthermore, OKX crypto exchange has delisted USDT for its EU customers due to stricter regulations. However, Tether has recently launched a blockchain recovery tool to enhance security and accessibility for its consumers. This tool allows for the migration of USDT between blockchains in the event of outages, ensuring continued accessibility. Users can initiate this process through a web or command-line interface, providing a seamless experience. This initiative demonstrates Tether’s commitment to resilience and user protection in the cryptocurrency market.
