Tether (USDT), the world’s largest stablecoin by market cap, could reach a valuation higher than Ethereum in 2021, the latest issue of Bloomberg’s Crypto Market Outlook suggested in a report earlier this month.
The trend is buoyed by the institutional shift towards and the demand for stablecoins in the cryptocurrency sector. In addition, governments around the world are similarly considering their own state-backed digital currencies, which can increase the demand for Tether, the report said.
At press time, the USDT is valued at nearly $16 billion and accounts for over 4% of the total crypto market cap. Ethereum, in contrast, sits on a $43 billion market cap at press time.
The rise of Tether
Mike McGlone, a senior commodity strategist at Bloomberg and author of the report, noted that the importance of USDT is growing as the stablecoin performs an increasingly vital function within the digital asset ecosystem.
He stated, “[The] USDt plays a pivotal role in the trading of digital assets resulting in many digital asset spot exchanges now denominating trading pairs in Tether rather than Bitcoin.”
Bloomberg’s #Crypto Outlook, October 2020 — #Bitcoin Trend, Adding Zeroshttps://t.co/gZYF3AWMe2
— Mike McGlone (@mikemcglone11) October 5, 2020
The Bloomberg report contrasted USDT with altcoin that fuelled the speculative crypto bubble of 2017. “Tether represents what many of the so-called cryptocurrencies aren’t: a stable form of payment,” the report stated.
Paolo Ardoino, CTO at Tether, shared the sentiment in a statement to CryptoSlate:
“As the most stable, liquid, and trusted stablecoin, it is powering so much innovation in crypto at the moment. Tether is lubricating many of the powerful protocols that Ethereum has given birth to, such as those in DeFi. Of course, we don’t see ourselves as competing with Ethereum.”
Arduino added that eclipsing Ethereum’s market capitalization, which currently stands above US$40 billion, “will be a powerful statement.”
Tether not a Bitcoin competitor
Meanwhile, on Tether’s position in the market alongside Bitcoin, Arduino said the team sees the USDT as a “complement to Bitcoin rather than a competitor.”
Tether works across a diversity of different blockchains, including Algorand, Bitcoin Cash’s Simple Ledger Protocol (SLP), Ethereum, EOS, Liquid Network, Omni, Tron, and Solana. Tether is driven to support and empower growing ventures and innovation in the blockchain space.
Meanwhile, Bloomberg’s McGlone forecasted that the continuation of quantitative easing measures and rising debt-to-GDP levels will provide a strong tailwind for the ascent of Bitcoin, with the digital gold asset on course to reach US$100,000 in 2025.
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