Tether (USDT) Market Cap Soars by Almost $30 Billion in 2023
In 2023, Tether (USDT), the leading stablecoin in the cryptocurrency market, experienced a significant increase in its total market capitalization, growing by almost $30 billion. Tether’s market cap started the year at $66 billion and ended at over $91 billion, marking substantial growth.
A Year of Growth
The increase in Tether’s market cap was particularly intense in the first quarter of 2023, amounting to $20 billion. The growth trend continued throughout the year, with a noticeable flattening of the curve from May to October. However, from mid-October to the end of December, the curve started to soar again, growing by $8 billion.
Tether’s growth was also fueled by the “misfortunes” experienced by other important stablecoins such as USD Coin (USDC) and Binance Coin (BUSD) during the year. In this context, USDT has remained the rescue stablecoin.
Tether in 2024
As we move into 2024, Tether has continued to set new records, bringing its market cap to $95 billion in the first two weeks of the year. In the ranking of Top Stablecoins by market capitalization, Tether is in first position, followed by USDC with $25 billion and DAI with $5 billion.
The gap in market capitalization between Tether and the second stablecoin, USDC, is a remarkable $70 billion. With the third stablecoin, DAI, the gap is even larger, at $90 billion.
Tether’s Dominance
Tether’s dominance in the stablecoin market is evident. In 2023, Tether’s share of the global stablecoin supply grew from 50% to 71%. As of now, Tether’s USDT tokens represent over 70% of all stablecoins in circulation.
Stability and Liquidity
One of the primary roles of Tether in the cryptocurrency market is to provide stability and liquidity. Its value is pegged to the US dollar, which means it offers a stable store of value, allowing traders to hedge against the volatility of other cryptocurrencies. This stability and liquidity make Tether a popular choice among crypto traders.
Regulatory Scrutiny
However, Tether’s connection with fiat currencies makes it susceptible to regulatory scrutiny. Regulatory bodies around the world are still figuring out how to deal with stablecoins, and any negative developments on this front could impact the acceptance of USDT. Tether has been the subject of ongoing scrutiny about how its stablecoin, USDT, is fixed to the U.S. dollar.
Controversies
Tether has been accused of engaging in fraudulent operations like pump-and-dump schemes, counterfeiting, wash trading, and other similar practices to influence the cryptocurrency market. There have been doubts about Tether’s assertions concerning its 1-to-1 pegging of USDT to the U.S. dollar due to the lack of confirmed audits from external auditors.
Looking Ahead
While 2023 was a year of significant growth for Tether, 2024 promises to be another exciting year for the stablecoin. With its market cap already at $95 billion, Tether is well-positioned to continue its growth trajectory.
As the cryptocurrency market continues to evolve, the role of stablecoins like Tether is likely to become even more important. Their ability to provide stability in a volatile market makes them an attractive option for investors and could drive further growth in Tether’s market cap in 2024 and beyond.
Angel Marinov is the Managing Editor at Coinlabz. With extensive knowledge of crypto payments and blockchain use cases, Angel is a trusted source of accurate and timely information
