Tether, the third most valuable cryptocurrency with a market capitalization of about $9.1 billion, is expected to pass Ethereum ($27 billion)) as the number two cryptocurrency, on the strength of the dollar.
Bloomberg News reported recently that there is a high probability that it expects Tether (USDT) to outsize Ethereum (ETH) in market capitalization.
The report outlines the organic growth of Tether’s market capitalization as one of the major reasons for the gain Bitcoin (BTC) is presently having in the mid-term.
“Interest in digital links to the dollar represents the need to handle and store value in the world’s reserve currency without an intermediary.”
What you need to know: Tether is designed as a blockchain-based cryptocurrency whose digital coins in circulation are backed by the same value of traditional fiat currencies, like the U.S dollar, Japanese Yen, or the Euro. It trades under the ticker symbol USDT.
Recall that Nairametrics earlier reported how Tether had overtaken XRP (XRP) as the number three most valuable cryptocurrency by market capitalization. Bloomberg reports added that the momentum with the help of the U.S dollar is expected to make Tether gain and move to the second spot:
“Absent an unlikely reversal in predominant crypto trends, it should be a matter of time until Tether passes Ethereum to take the No. 2 spot in total assets behind Bitcoin. Receiving help from widespread adoption with a workable case as a proxy for the world’s reserve currency, there seems little to stop the increasing adoption of the dollar-linked stable coin.”
Also, Bloomberg’s report expects Tether to rise based on Ethereum’s limited upside.
“We see little upside in the ETH price absent a rising tide from Bitcoin. The pre-eminent crypto is breaking away from the pack in terms of adoption and is supported by almost-ideal macroeconomic conditions for stores-of-value amid quantitative easing.
“Tether is in a similar position. Strengthening Dollar Supports Stable Coins. The advancing dollar will fuel demand for the Tether stable coin, in our view. In terms of gold and Bitcoin, the dollar is depreciating, but it is going in the other direction vs. most other currencies.
“The greenback appears best positioned as global currency values retreat, with all facing unlimited supply.
“Tether and stable coins are gaining traction as vehicles for dollar exposure without intermediaries and for transferring value among the numerous highly speculative and volatile crypto assets.”