Tether, the widely recognized stablecoin, is nearing a significant milestone with its total assets creeping towards the $100 billion mark. In a testament to its exponential growth over the past six years, Tether’s current total assets stand at an impressive $95.2 billion, according to the firm’s transparency report. Of this amount, a staggering $92 billion is allocated to its flagship dollar-pegged stablecoin, USDT.
Gabor Gurbacs, an esteemed strategy advisor at VanEck, reaffirmed his unwavering support for Tether, drawing parallels between the skeptics’ dismissal of the Bitcoin ETF and his backing of the stablecoin. With an air of confidence, he recalled how he had flagged Tether’s potential to reach $100 billion back in the spring of 2017 when its market cap was merely under $100 million. Gurbacs emphasized the importance of recognizing exponential innovations, urging investors to listen to ambitious projects and predictions that may initially seem far-fetched.
Since its inception just six years ago in 2018, Tether’s market capitalization has experienced an astronomical surge of 6,560%. As Tether evolves, it seems to be progressively transforming into a Central Bank Digital Currency (CBDC), a testament to its adaptability and resilience. This metamorphosis underscores the significance of small, determined teams that can bring exponential innovations to life.
Fourth Quarter Successes
Paolo Ardoino, the Chief Technology Officer (CTO) of Tether, succinctly acknowledged the firm’s fruitful fourth quarter. While additional details were not provided, it is evident that Tether has capitalized on high yields offered by US Treasury bills, utilizing a portion of its profits to invest in Bitcoin. According to Tether’s reserves report, a substantial 85.7% of its reserves comprise “Cash and Cash Equivalents and Other Short-Term Deposits.” Digging deeper, 76.4% of these reserves are allocated to US Treasury bills, 11% to overnight reverse repurchase agreements, and the remaining 11% to money market funds.
Stablecoins currently represent 7.2% of the overall cryptocurrency market capitalization, totaling an impressive $132 billion. However, this figure marks a decline from the 16-17% market share that stablecoins held in 2022. Within this landscape, Tether boasts a commanding market dominance of nearly 70%, far surpassing its competitors. Over the past year, Tether’s supply has surged by almost 40%, while its main rivals have experienced declines in circulation. Circle’s USDC supply, for instance, has contracted by a considerable 44% in the past year, leaving just $24.8 billion in circulation and an overall market share of approximately 19%. MakerDAO’s DAI takes the third spot among stablecoins, with $5.3 billion in circulation, closely followed by TrueUSD (TUSD) with $2.3 billion.
Tether’s ascent to becoming one of the most dominant players in the cryptocurrency market is unquestionable. With total assets approaching the momentous $100 billion milestone, Tether’s rise showcases the growing popularity and acceptance of stablecoins. As Tether’s market capitalization continues to surge, it is evident that the unique attributes of stablecoins are reshaping the crypto landscape, providing stability amidst the volatility of the digital assets market. Tether’s success story serves as a testament to the potential of exponential innovations and the crucial role played by determined teams in realizing them.