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Tether Tops $7 Billion Market Cap, Trades at Premium

2 mins
Updated by Gerelyn Terzo
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In Brief

  • Tether has hit an all-time high in terms of market capitalization and has been trading at a premium on some exchanges.
  • Since the beginning of the year, USDT market cap has increased by a whopping 56%.
  • As a percentage of the entire crypto market, Tether now commands 3%.
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The demand for stablecoins has reached record levels, prompting the world’s largest producer to keep on minting them. Tether has hit an all-time high in terms of market capitalization and has been trading at a premium on some exchanges.
Crypto analytics tracker Skew has just reported that Tether’s market capitalization has reached $7 billion. Other analytics trackers, such as Coinmarketcap.com, are reporting a slightly lower figure of around $6.4 billion at the time or writing.
Tether
USDT market cap YTD – Coinmarketcap.com

Tether Minting at Record Levels

Since the beginning of the year, USDT market cap has increased by a whopping 56%, which dwarfs that of Bitcoin only gaining 2.3% in terms of market cap over the same period. As a percentage of the entire crypto market, Tether now commands 3%, which is more than Litecoin and EOS combined. As reported by BeInCrypto, Tether minted another $120 million late last week and has done so several times already this month. Stablecoin issuance surged to $8 billion during the first quarter of this year, more than all of 2019 combined. When USDT trades at over a dollar it signifies greater demand for the asset, which has been the case in recent months. Tether USDT Bitcoin

What Is Driving USDT Demand?

According to CryptoCompare’s monthly exchange review, stablecoin volume surged in March; over 21 million in BTC representing 73% of the total BTC volume traded into fiat or stablecoins.
stablecoins
Stablecoin volume to BTC – Cryptocompare.com
Demand for other stablecoins such as USDC and PAX has also increased, but Tether remains the king of the crypto castle. Analysts and crypto industry observers have largely viewed the heightened demand for stablecoins as bullish, noting that it could signal readiness to buy up cryptocurrencies in a time when markets are depressed. Another factor at play could be that investors and traders are moving into safer-haven currencies fearing a devaluation of theirs. More exposure to the dollar would be a good move in countries that are facing inflationary issues due to economic pressures. China is one such country where Tether demand has increased recently, as traders seek liquidity and exposure to other digital assets through stablecoins. Fiat-to-crypto transactions are still banned in the People’s Republic, which makes Tether the vehicle of choice for getting into digital assets. Many exchanges, such as Binance, are also offering good interest rates on stablecoins, something that will not be available from any high street bank anytime soon. This makes them more attractive than fiat; they maintain a peg, which reduces volatility and exposure that riskier assets such as BTC have.
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Martin Young
Martin Young is a seasoned cryptocurrency journalist and editor with over 7 years of experience covering the latest news and trends in the digital asset space. He is passionate about making complex blockchain, fintech, and macroeconomics concepts understandable for mainstream audiences.   Martin has been featured in top finance, technology, and crypto publications including BeInCrypto, CoinTelegraph, NewsBTC, FX Empire, and Asia Times. His articles provide an in-depth analysis of...
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