Tether’s Market Cap Just Hit $7 Billion: What It Means for Crypto Market

Charles Edwards, a digital asset manager, remarked in January that “major changes in Tether’s market capitalization have led Bitcoin’s price over the last 1.5 years.”
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According to data shared by crypto news aggregator Unfolded, the market capitalization of Tether’s USDT, the leading dollar stablecoin, just surpassed $7 billion. This means that USDT now makes up approximately 3.4% of the entire crypto market’s market capitalization per CoinMarketCap.

What’s especially notable about this is that according to data from, the market capitalization of the cryptocurrency was at $4.5 billion just two months ago.

Here’s what this means (or doesn’t mean) for the crypto market.

Is It Bullish for Bitcoin?

Most believe that this stark trend is a positive sign for the Bitcoin price.

Charles Edwards, a digital asset manager, remarked in January that “major changes in Tether’s market capitalization have led Bitcoin’s price over the last 1.5 years.”

Indeed, prior to the nearly 50 percent crash in November 2018 that saw Bitcoin plunge from $6,000 to $3,150, the amount of USDT circulating fell by hundreds of millions; also, prior to the majority of 2019’s crypto rally was the printing of hundreds of millions worth of USDT.

Fundamentally, this makes sense. As explained by Messari’s Ryan Selkis, many of these printed stablecoins are making their way to exchange wallets, implying that the stablecoins are “dry powder” ready to be traded for Bitcoin and other cryptocurrencies when the time is right.

Report: Maybe, Issuances Mean Nothing

Although the consensus is that the growing supply of stablecoins is bullish, this narrative has been under some pressure recently.

VOX — a research blog on markets run by “leading economists” — on April 17th released a report indicating that there is no direct relationship between the supply of stablecoins and the price of cryptocurrencies.

The core of their argument was the charts seen below, which show that Bitcoin and Ethereum don’t have a consistent price response in the two and a half weeks after a USDT issuance, but instead, move with seemingly normal volatility as opposed to bullish price action.

They came to this conclusion after running the numbers:

We find no systematic evidence that stable coin issuance affects cryptocurrency prices. Rather, our evidence supports alternative views, namely, that stable-coin issuance endogenously responds to deviations of the secondary market rate from the pegged rate, and stable coins consistently perform a safe-haven role in the digital economy.

Buy-Side Pressure is Increasing

Whatever the case is, it is clear that the demand for purchasing Bitcoin and other cryptocurrencies is shooting higher, which should correspond with a bullish trend due to simple supply-demand dynamics.

Grayscale Investments, a crypto fund manager and provider, released its Q1 investment report on April 16th. The company reported that over the quarter its products saw investments of $503.7 million — over double what was invested in Q4 of 2019, as reported by Blockonomi previously. 99% of the capital went towards the firm’s Bitcoin Trust and Ethereum Trust, which trade over-the-counter as GBTC and ETHE, respectively.

Grayscale has seen so much demand that as of April 7th, its Ethereum Trust was trading at a 540% premium to the ETH underlying the shares, as noted by Reality Shares CEO Eric Ervin. 

There’s a similar trend on the retail side of things.

Speaking to Decrypt at the end of March, a spokesperson for Bitcoin exchange Kraken said that the company has recorded an 83% rise in signups, and a “further 300% increase in intermediate verifications,” allowing accounts to deposit fiat instantly. OKEx, Bitfinex, Paxful, and Luno also confirmed to the outlet that they’ve seen a notable increase in signups and volume simultaneously.

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I am a writer who has been following the cryptocurrency space since 2013. My insights and interviews have been featured in leading publications in the industry such as LongHash, NewsBTC, and Decrypt. When I am not writing, I work as a team member of the EXODUS division of HTC, a Taiwanese electronics company. I own a small amount of Bitcoin. Contact

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