Tether’s market capitalization has soared to new heights, after gaining $1 billion within seven days. Tether revealed on August 14 that the USDT market cap broke past the $12 billion marks, as the demand for stablecoins continues to grow.
Stablecoins like USDT have in the cryptocurrency space continued to gain momentum over time. The increased popularity in stablecoins can be attributed to the ability of coins, often associated with cryptocurrencies, to protect investors and traders against volatility. The dramatic rise in the USDT market cap corresponds to an increase of 140 percent, an additional $7 billion increase since March 2020.
USDT market cap skyrocketing
The swift growth in Tether’s market cap is the impetus behind the 12-months long stablecoins market growth. According to a study by Coin Metrics back in July, the entire stablecoins market took five years to hit $6 billion in market capitalization, but only took four months to increase from $6 billion to $12 billion.
At the time, the study consisted of the entire market for stablecoins. At present, USDT is worth $12 billion on its own. In fact, the other stablecoins on the market are not even close to reaching the milestones set by Tether. On the other hand, the USDC is the closest stablecoin with a total market capitalization of just over $1 billion, followed by the DAI at just under $420 million, and the Gemini Dollar follows the bundle with about $9 million.
Tethers growth impact on Bitcoin
Major cryptocurrency exchanges such as Bitfinex and Binance utilize USDT as an alternative to traditional currencies. Due to this fact, the majority of investors in crypto space depend on Tether to preserve funds in the sides.
Furthermore, USDT is frequently utilized as a hedge against the significant cryptos; it can be argued that Tether’s total supply portrays the capital kept on the sidelines. Some analysts argue the increasing supply of USDT, the weakening of the dollar, on top of institutional adoption; has resulted in a sentiment that the price of BTC could rise. Some of these analysts anticipate BTC to hit new milestones by next year.