USDT is a stable coin, not a cryptocurrency. And it currently has a market capitalisation of more than $9 billion, putting it comfortably ahead of Ripple (XRP), the cryptocurrency that previously held that position.
The recent decline in XRP’s market capitalisation has resulted in a figure well below $9 billion, while USDT’s market capitalisation has actively begun to rise and is likely to exceed $10 billion in the near future.
Certainly, the first two cryptocurrencies are quite far ahead in terms of market capitalisation. But while BTC with over $174 billion seems unassailable, ETH by and large is not that far off – at the moment, Ether’s capitalisation is $26 billion.
That said, Teaser’s capitalisation has doubled in the last two months, although ETH’s capitalisation has almost doubled as well since the mid-March lows, but it’s still lower than the February 2020 highs.
The main source of growth in USDT is that it is playing an increasingly important role as a source of liquidity in DeFi, which is creating high demand for this stable coin. A market share of 77.84% has been achieved among Ethereum blockchain-based stablecoins, and in particular the ERC20 token, which has seen demand rise by around 113% since the beginning of the year, from $2.3 billion to $4.9 billion.
USDT is also present in other blockchains, such as Algorand, Ethereum, EOS, Liquid Network, Omni and TRON.USDT trading volumes on exchanges are now also very high. In absolute terms, the most traded pair on all exchanges in the world is BTC/USDT. In particular, daily trading volumes of USDT on all cryptocurrency exchanges are generally higher than BTC/USDT also dominates Ether pairs, and is significantly higher than ETH/USD and ETH/BTC, not to mention pairs with other cryptocurrencies.
Tether’s technical director, Paolo Ardoino on the matter said:
“Tether is clearly gaining popularity as the most liquid and reliable stable coin. The opportunity to become the third largest cryptocurrency underlines the key role USDT is starting to play in the cryptocurrency ecosystem. USDT is gaining momentum amid a growing awareness that stable coins will play an important role in the future of finance as a reliable form of digital money. Tether functions as a reserve currency for the cryptocurrency market. Recent market volatility has demonstrated a huge need for such an asset – investors want a safe haven to reduce risk in their portfolios.”