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The market capitalization of Tether (USDT) has grown to $10 billion. This puts the cryptocurrency token at third place behind Bitcoin (BTC) and Ethereum (ETH).
Tether (USDT) market capitalization has crossed $10 billion level yesterday. This has made Tether (USDT) climb to the third place in the cryptospace. At the start of this year, USDT had a market capitalization of $4.1 billion. However, there are slight variances across aggregators. Coingecko has reported a capitalization of $10 billion while Coinmarketcap says about $9 billion. Other stablecoins are also seeing massive gains. USD Coin (USDC) has grown by more than 300% north of $930 million and less than $450 million at the start of the year.
Tether (USDT) Capitalization Grows as Other Stablecoins Follow Suit
USDC has rapidly grown to its current position. The stablecoin is now the 18th largest cryptocurrency token by market capitalization. The emergence of the stablecoins is seen by many as an indicator of rapid inflows into the crypto space. Many cryptocurrency traders consider the use of stablecoins as an alternative to holding fiat. The reason for this is simple. Cryptocurrency conversions to fiat currencies come with a lot of bureaucratic red-tape and other regulatory issues. Stablecoins as tokens are easily exchangeable and provide a representation of fiat liquidity in terms of value.
The reason for the increased inflows into the crypto space could be the increase in funds inflow into decentralized finance. Defi values within the crypto industry recently topped $1billion. It should be mentioned that a significant portion of the inflows came in via stablecoins.
Stablecoins have experienced a resurgence with renewed interest in the crypto world. The COVID-19 pandemic has come with its economic fallout. Many people are considering the crypto space to be the last stand against inflation. Their assertion may prove to be true. Cryptocurrencies have finite amounts in terms of liquidity. They aren’t subject to inflationary factors the way fiat currencies are. The next effect of this is that there will be a rise in the number of stablecoin tokens in circulation as some of them have already increased exponentially.
Some Stablecoins May Make a Comeback
Binance stablecoin BUSD is fourth place where stablecoins are concerned. It has a $166 million market capitalization. Other stablecoins such as True USD (TUSD) and Paxos (PAX) have failed to grow. The story isn’t over for these stablecoins however. As there is a renewed interest and there is going to be a rapid rise in inflows driven by stablecoins. New experiments on different kinds of stablecoins are going to be held.
Tether (USDT) has grown steadily despite the controversies. It serves as a boost to the crypto space that the technology that issues Tether tokens is trusted. This could create a new paradigm for stablecoins. One where the technology is trusted as opposed to the regulatory framework that governs it.
It also presents a dilemma for regulatory bodies. If a distributed ledger technology (DLT) token fails several tests but is widely accepted the authorities will have no choice but to find a way to create acceptance. Otherwise, they risk having mass disobedience to rules by the populace on their hands. This is one of several issues that the emergence of Tether (USDT) and other stablecoins has precipitated.