Tether USDT Soars Past $120B! The Sleeper Stablecoin Dominating the Market

Tether’s stablecoin, USDT, has hit a new milestone, surpassing $120 billion in market capitalization for the first time, suggesting a potentially positive sentiment for the entire cryptocurrency market.

Launched back in 2014, Tether has now crossed the $120 billion market cap threshold and continues its steady climb.

What Led to Tether’s Growth

Stablecoins serve as a bridge between fiat currencies and digital assets. An increase in stablecoin supply is often viewed as a signal of an upcoming bull market, as it suggests investors are accumulating stablecoins in preparation for investing in cryptocurrencies. Conversely, a lack of stablecoin inflows can indicate that the market is undergoing a correction.

USDT is backed by U.S. Treasury bonds, providing it with greater coverage than actual U.S. dollars. Since Tether earns 5% by holding Treasuries, it uses the earned interest to purchase Bitcoin. This business model has propelled the stablecoin to surpass a $120 billion market cap.

According to Tether's Treasury cash flows, a significant portion has recently been sent to centralized exchanges (CEX). Data from Arkham Intelligence shows substantial inflows into Coinbase, Kraken, and Binance over the past week.

Stablecoins Could Be the Future of Money

Beyond potentially triggering a bull market, USDT’s rising market cap might indicate more profound changes in the cryptocurrency landscape.

Mass adoption of Bitcoin as a currency has been predicted as a possible endgame scenario. However, USDT’s growing dominance could lead to a completely different outcome.

Gresham’s law posits that a stronger form of money disappears from circulation when it competes with a weaker form. In a mass adoption scenario for Bitcoin, it’s reasonable to consider that the world might use USDT for transactions while holding Bitcoin as a store of value.