Weeks ago, NewsBTC reported that the market capitalization of leading crypto stablecoin Tether (USDT) was on track to $10 billion. This week, after a large minting of coins, the milestone was reached.
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Crypto’s “Reserve Currency” Hits $10 Billion Market Cap
According to Messari analyst Ryan Watkins, the market capitalization of USDT passed 10 billion on June 30th. It is the third cryptocurrency currently in this 10-figure range.”
At the start of the year, the market capitalization of the asset was closer to $4.5 billion. And at the start of 2019, the figure was well under $3 billion.
Chart of USDT's market capitalization shared by Messari analyst Ryan Watkins, a former investment banker.
Some see USDT’s market cap growth as a sign of increasing interest in cryptocurrency.
Because USDT can be easily transacted into Bitcoin, Ethereum, and others, firms/large traders can theoretically mint the asset via Tether. After that, they can send the coins to exchanges to be traded for the asset.
Though, this goes the other way: Paolo Ardoino said in a podcast that during March, traders that couldn’t liquidate their coins into fiat opted for USDT instead. Ardonio is the CTO of Tether and Bitfinex.
The Compound Effect on Tether
USDT’s market capitalization may also be benefiting from growth in decentralized finance, specifically the Compound protocol.
Compound is an Ethereum-based money-market protocol that allows investors to borrow and make money by lending out cryptocurrencies. The platform supports assets from Ethereum and Basic Attention Token to stablecoins like DAI and USDT.
Due to a number of variables, USDT has quickly become one of the most popular coins on the platform.
At one time last week, Compound reported that there was more than $150 million worth of USDT deposited in the protocol.
This is but a fraction of the total supply cap. But the increase in demand for the stablecoin may have spurred investors enough to send money to Tether and receive USDT in return.
Importance to Crypto Industry Grows
With USDT’s market capitalization surmounting $10 billion, its importance to this industry becomes even more pronounced.
Qiao Wang, an ex-Messari executive and analyst in the space, recently said the following:
“3 companies that, if something catastrophic happened to them today, would cause a tsunami in these markets: Silvergate, crypto banking; Tether, reserve currency of crypto; and Genesis, primary venue of liquidity for crypto loans.”
Its market capitalization may only be around 4-5% of the entire crypto market. Yet USDT accounts for a large portion of the volume and on-chain value, with more and more exchanges and other service providers adopting it.
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Featured Image from Shutterstock Price tags: xbtusd, btcusd, btcusdt Crypto "Reserve Currency," Tether (USDT) Hits $10 Billion Market Capitalization