Tether’s market cap reaches $15 billion thanks to DeFi boom
The total market cap of Tether (USDT) has increased nearly fourfold in 2020, thanks in part to the boom of the decentralised finance (DeFi) sector
The increasing popularity and market cap of the DeFi sector are resulting in a mass minting of USDT coins. In August, a total of $3 billion worth of USDT tokens were minted, leading to the market cap of the stablecoin to reach $15 billion.
USDT is currently the third-largest cryptocurrency in terms of market cap, after overtaking Ripple (XRP). At the start of 2020, USDT’s total market cap was only $4 billion. However, total USDT in circulation is now over $15 billion.
The core driver behind USDT’s increased market cap is the DeFi space. The increasing popularity of DeFi tokens has done a lot of good for USDT as more liquidity pools are now being based on stablecoins.
Tether announced that its total market cap had surpassed the $15 billion mark, adding that the market cap added a few billion dollars last month. The firm tweeted that “Tether has just surpassed a $15 billion market capitalisation! In only one month, Tether’s market cap has increased by more than $3 billion, maintaining its number one spot as the most liquid, stable and trusted currency!”
Although the DeFi space is the primary reason behind the massive surge in USDT’s market cap, most of the liquidity for stablecoins is held on centralised exchanges. According to an infographic from Flipsidecrypto.com, Binance and Bitfinex alone hold $2 billion of the total USDT coins currently in circulation.
Ethereum, home to the DeFi space, has benefited massively from the rising popularity of the new sector. Tether, in its Transparency Report, revealed that Ethereum now houses $10 billion USDT tokens, or two-thirds of the entire market supply. The Tron network currently holds $4.2 billion worth of USDT coins and the Omni blockchain houses $1.3 billion Tether coins.
Although Ethereum is home to most of the Tether supply, there are moves to transfer some of the coins to other networks due to the rising gas fees negatively impacting on the Ethereum blockchain.
Tether is considered by some to not be a trusted entity within the cryptocurrency space after facing numerous allegations of artificially inflating the crypto market during the bull run of 2017. Some proponents within the crypto space are calling for a full audit of Tether and a disclosure of its financial documents to determine whether the company has $15 billion in cash and assets to back up the stablecoin in circulation.
The post Tether’s market cap reaches $15 billion thanks to DeFi boom appeared first on Coin Journal.
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Hassan Maishera, Khareem Sudlow