Tether’s total market capitalization (USDT) increased almost fourfold in 2020, thanks in part to the decentralized finance sector (DeFi) boom
The growing popularity and market capitalization of the DeFi sector are resulting in a mass minting of USDT currencies. In August, a total of $ 3 billion in USDT tokens were minted, driving stablecoin’s market capitalization to reach $ 15 billion.
The USDT is currently the third largest cryptocurrency in terms of market capitalization, after overtaking the Ripple (XRP). In early 2020, USDT’s total market capitalization was just $ 4 billion. However, the total USDT in circulation is now over $ 15 billion.
The main driver behind the increase in USDT’s market capitalization is the DeFi space. The increasing popularity of DeFi tokens has done very well for the USDT as more liquidity pools are now being based on stablecoins.
Tether announced that its total market capitalization has exceeded the $ 15 billion mark, adding that its market capitalization has increased by several billion dollars in the past month.
The company tweeted what “Tether has just passed the $ 15 billion market capitalization! In just one month, Tether’s market capitalization increased by more than $ 3 billion, maintaining its first position as the most liquid, stable and reliable currency! “
Although the DeFi space is the main reason behind the massive increase in USDT’s market capitalization, most of the liquidity for stablecoins is held on centralized exchanges. According to an infographic from Flipsidecrypto.com, Binance and Bitfinex alone hold $ 2 billion of the total USDT currencies currently in circulation.
Ethereum, home to the DeFi space, has benefited enormously from the growing popularity of the new industry. Tether, in its Transparency Report, revealed that Ethereum now hosts $ 10 billion USDT tokens, which is two-thirds of the entire market offering. The Tron network currently holds $ 4.2 billion in USDT currencies and the Omni blockchain hosts $ 1.3 billion in Tether currencies.
Although Ethereum is home to most of the Tether supply, there are moves to transfer some of the currencies to other networks due to increased gas tariffs that negatively impact the Ethereum blockchain.
Tether is seen by some as an unreliable entity within the cryptocurrency space, having faced numerous claims to artificially inflate the cryptocurrency market during the 2017 bull run. Some proponents within the crypto space are calling for a full audit of Tether and the disclosure of its financial records to determine whether the company has $ 15 billion in cash and assets to support the pending stablecoin.