Tether’s Market Cap Is Close To A Record
Tether (USDT), the world’s largest dollar-pegged stablecoin, continues to grow after recovering from the turbulence caused by Terra in mid-2022. USDT’s emerging market cap is very close to breaking a record. CoinGecko data shows that Tether’s market cap has risen more than 20% this year to $80 billion, with a 12% increase in the last four-week period alone. This means that Tether’s market cap is now just $3 billion below the record level of $83 billion reached in May last year.
Markus Thielen, head of research and strategy at crypto services provider Matrixport, says that behind Tether’s valuation is the aggressive mint and issuance on Tron Network, which has a larger presence in mainland China than Ethereum and generally focuses on money movements. Tether issued from Tron accounts for more than half of the stablecoin’s current market value, according to data tracked by Matrixport. In a note to clients on Thursday, Thielen said:
“Bitcoin price soared from $20,000 to $28,000 in a few days after news began circulating about unlimited support for bank deposits. However, it seems that USDC holders either convert their stablecoins to Tether’s USDT or buy Bitcoin with this money by selling only $10 billion USDC.“
The market value of the stablecoin (USDC), owned by the world’s second largest dollar-pegged currency Circle, fell by 27% to $ 32.5 billion. Investors began exiting USDC last month after Circle announced it was holding $3.3 billion in collapsing Silicon Valley Bank (SVB). The market cap of BUSD, Paxos’ dollar-pegged centralized stablecoin, fell 58% to $7 billion this year. In February, the New York Department of Financial Services ordered Paxos Trust Company to cease printing BUSD. On top of that, Paxos promised to make payments by February 2024 and stopped issuing new tokens.
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