Over the past year, stablecoins have seen tremendous growth. The market capitalization of stablecoins recently hit a historic high of $172.151 billion.
Tether Hits All-Time High
As the stablecoin market grows, Tether's USDT is leading the way with continued growth. In fact, Tether has set a new record high market capitalization.
This move in the stablecoin market was noted by IntoTheBlock. Through their official X page, they shared that,
âTether has hit an all-time high in market capitalization, with the total value of USDT approaching $120 billion.â
As of this writing, Tether's market capitalization is $119.14 billion, marking a 40.68% increase over the past year.
During this time, Tether's market capitalization jumped from $84.69 billion to $119 billion.
Notably, this growth exceeded $83.3 billion, topping its closest competitor in the stablecoin space, Circle's USDC, which has also seen significant growth over the past year, reaching $35 billion.
What factors drive the growth of USDT
As Tether reaches a new high market cap, the question arises as to what factors are driving this growth.
According to TinTucBitcoin's analysis, many market conditions are creating conditions for Tether to grow further.
First, USDT adoption has skyrocketed over the past year. It has increased from a low of 18% to 31% in that time. This suggests that many individuals, institutions, and retail traders prefer USDT over other stablecoins. This preference has helped Tether gain a good position in the market.
Additionally, although the stablecoin market is diverse with many different coins, USDT has emerged as the main trading pair. Its dominance over other stablecoins is a clear testament.
According to Defillama, USDT dominance has reached 69.22%. This shows that USDT is widely used for trading pairs on exchanges, so high dominance means high liquidity in the market.
Finally, USDT reserves on exchanges have increased sharply over the past year as market capitalization has increased.
This demonstrates the increased use and acceptance of USDT, as noted earlier.
The presence of USDT on exchanges shows that most users are using it to make trades and purchases, compared to other stablecoins.
In short, when Tether reached a record high in market capitalization, this showed an increased preference for USDT in trading activities.
This also marks a market shift towards using stablecoins as a store of value for most cryptocurrency users.
