USDT is now also the fourth largest crypto by market cap. The news was announced in a Tweet from the company.
Tether’s market cap has been rising all year. Its pace is rising, too. It took almost six months, from mid-December last year to mid-May this year, to double from roughly $4 billion to over $8 billion.
The next jump, to over $13 billion, took place at the beginning of September. Tether has seen roughly half of its rise come in the last four months.
DeFi-nately Interested in Tether
Much of Tether’s market cap rise is likely due to interest in decentralized finance (DeFi). When it hit $15 billion in mid-September, BeInCrypto reported that DeFi projects were behind much of the gain.
Aave, Compound, and Solana were highlighted as driving much of the interest in USDT. Users tend to use stablecoins such as Tether in DeFi projects because of the lack of volatility.
It can also retrieve misdirected funds under some circumstances. As such, when the DeFi market grows, the need for USDT rises accordingly.
According to DeFi Pulse, in mid-August, the total value locked (TVL) in DeFi projects was almost $6.3 billion. Currently, the same indicator stands at $15.82 billion.
The Rocky Road to Doublin’
There are some stones in the path of Tether’s growth, however. In August, Tether showed its retrieval chops by returning one million USDT to its rightful owner.
The user accidentally transferred the sum, but the company could blacklist the addresses the coins were sent to and sort the problem out. What some hailed as a wonderful deed also took on a menacing shadow.
Those in the crypto community who are averse to control mechanisms saw the move as a problem. From their perspective, there is nothing to stop a government from coercing Tether into doing the same thing against its enemies.
Government features differently in Tether’s other perceived threat. The on-going case in the State of New York regarding the company’s lack of financial disclosure has cast a palpable pall over sentiment. The lack of disclosure itself also raises concerns.
Despite the disclosure and control issues, Tether’s market cap continues to rise. Next stop, $25 billion?