Tether could overtake Ethereum as the second most valuable cryptocurrency at the end of next year, while Bitcoin is expected to test the $ 14,000 level before the end of the year
Tether is destined to replace Ethereum as number two in the industry in terms of market capitalization, according to Bloomberg’s Bitcoin Trend report.
The financial media said that if demand for Bitcoin and stablecoins continues, Tether’s market capitalization could surpass Ethereum’s by the end of next year. Although Bitcoin is expected to maintain its number one position, Ethereum will leave its place to the Tether (USDT).
Tether has overtaken several other cryptocurrencies in recent years. USDT is currently the third most valuable cryptocurrency in market value, after overtaking XRP, Bitcoin Cash, Binance Coin (BNB) and a number of others.
To support its view, the report cited Ethereum’s market capitalization, which stagnated at around $ 30 billion during most of 2019 and 2020, before being driven by the DeFi advertising campaign in the last quarter, currently around $ 43 billion.
The USDT has seen its market capitalization grow steadily since 2017, despite the bearish trend affecting the overall cryptocurrency market. Tether’s market capitalization at the beginning of the year was $ 4.1 billion, but is now closing at $ 16 billion.
Bloomberg believes that the rapid increase in the adoption of stablecoins will pave the way for the development and adoption of central bank digital currencies (CBDCs). Bloomberg analysts added that something special would be needed to prevent the growing adoption of USDT, the main stablecoin.
Bitcoin could test the $ 14,000 level this year
According to the report, Bitcoin’s demand indicators show that the cryptocurrency could resume the 2019 high of $ 14,000 before the end of the year. “Some of Bitcoin’s main demand indicators point to a revisit of the 2019 high of around $ 14,000, potentially this year“Wrote Bloomberg.
Rising Bitcoin market capitalization is increasing demand for cryptocurrencies. The report cited MicroStrategy’s huge investment as an indication that Bitcoin adoption is on the rise.
“At less than $ 200 billion, the Bitcoin market is very small for many large institutions, including central banks, that would add cryptocurrency as part of their holdings, but if Bitcoin’s market capitalization increases, it will become more and more like a digital version of gold ”Added the report.
Bitcoin’s market capitalization may increase astronomically in the coming years. A new Fidelity report revealed that Bitcoin’s market capitalization has room to grow, describing its current state as a ‘drop in bucket‘. Fidelity researchers believe that the influx of institutional investors could cause Bitcoin to disrupt various markets and massively increase market capitalization.