Tether prints $10B in 3 months, nears exclusive $100B crypto club

Tether is only a few mints away from entering an exclusive subset of highly-valued crypto projects — the $100 billion club.

Only four cryptocurrencies in history appear to have hit that mark: bitcoin (BTC), ether (ETH), XRP and binance coin (BNB).

Now at a $95 billion market cap, tether would be the first stablecoin to do so.

Bitcoin crossed over in October 2017, on its way to $20,000 for the first time. Ether joined a few months later alongside XRP, although the latter ended up slipping back below shortly after.

BNB came the following cycle, almost clearing $110 billion in November 2021 after bitcoin hit all-time high. It also quickly dropped out of the club. Now, only bitcoin and ether remain.

Other cryptocurrencies have come very close. Cardano (ADA) reached $95 billion in the last bull market and dogecoin (DOGE) nearly broke $89 billion a few months earlier.

Solana even brushed with $77 billion during bitcoin’s $69,000 pump more than two years ago. It’s currently worth about half as much despite a healthy recovery over the past eight months.

The chart below plots market caps as if they were all launched on the same day, barring some unavailable data from the early months of some projects.

Bitcoin isn’t shown as it would dwarf the others

Stablecoins like tether are much different to those other cryptocurrencies, whereby market caps are determined by multiplying their token prices by their circulating supplies.

Prices for cryptocurrencies like bitcoin and ether are discovered on crypto exchanges. With USDT, the price is pegged to $1 dollar and each token should be backed by one dollar’s worth of assets kept in Tether’s portfolio — these days mostly US Treasurys.

Markets will generally trust that each USDT is worth $1 as long as Tether redeems tokens for actual US dollars.

(USDT’s peg sometimes wobbles on certain exchanges, as do other cryptocurrencies. which often draws attention. Those situations mostly reflect the liquidity on those platforms rather than the underlying value of tether itself.)

So, each USDT token is generally considered fully backed as long as the value of Tether’s portfolio exceeds the supply — hence its recent shift toward the very-liquid short-dated US Treasurys.

Tether makes up more than 70% of all stablecoins

With this in mind, USDT’s market cap is effectively always equal to its circulating supply, which ebbs and flows due to demand from major traders, market makers, liquidity providers and other ecosystem participants.

Tether sells and loans USDT directly. The firm has historically burned supply when demand is low, and minted new tokens when it increases.

USDT is featured in thousands of pairs across the crypto space and is the most traded cryptocurrency on the market, seeing about $45 billion in volume per day right now, per CoinGecko.

Tether was busy printing fresh supply as markets frontrun the approval of spot bitcoin ETFs in the US.

Last October, there was $85 billion USDT in circulation — which means Tether has printed more than $10 billion in three months. Bitcoin has jumped 60% in that time.

In any case, should tether hit the $100 billion, it would be the slowest crypto project to do it so far.

Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.