The market capitalization of Tether (USDT) is above $90 billion, according to the data. The significance of this rise on Bitcoin's price may be explained here.
The Market Cap for Tether Has Been Rising Consistently Tether is a cryptocurrency that has recently been tied to the US Dollar, which means that its price stays consistent around $1. The asset's market valuation surpasses that of any other stablecoin, making it the most well-known in its field.
The biggest stablecoin supply has been steadily increasing as of late, according to the market intelligence portal IntoTheBlock. The following chart displays the movement of market capitalizations for different stablecoins in the cryptocurrency industry over the last 12 months.
The accompanying graph shows that Tether's market value has been steadily increasing over the last year, but USD Coin (USDC), its nearest rival, has seen its market cap decline due to withdrawals.
In comparison to these two assets, the other stables are rather little in the chart, suggesting that they may not have much of an impact on the market as a whole.
To what extent does Tether, a major stablecoin, affect Bitcoin and other cryptocurrencies in the market? What the stablecoins stand for is the key to answering that question.
When investors wish to shield themselves from the sector's other assets' volatility, stables are a common choice. However, those who have their money locked in these tokens connected to fiat typically want to go back to the volatile side, as they would have gone with fiat money if they intended to avoid cryptocurrencies completely.
Coins like Bitcoin will inevitably see price pressure from these investors when they return to the market. This is why the stablecoin supply may be thought of as the "potential buying supply" for cryptocurrencies like Bitcoin and others.
The market capitalization of USDT can increase in two ways. The first is new money pouring into the asset itself, which is good news for the market since it increases the overall amount of money in the industry.
Two, you may switch it out for another coin, like Bitcoin. Since this is only a reorganization, the total amount of capital in the sector would remain same. However, the value of the asset being sold off to make room for the stablecoin would inevitably decrease.
When the price of Bitcoin and the market cap of Tether both rise, it means that new investors are pouring money into both coins, which is good news for the market.
The connection between the USDT market cap and BTC has nearly reached 100% during this last surge, as both have rocketed up, as stated in a post by analyst James V. Straten on X.
