It is believed that the growth of Tether's market capitalization is linked to its increasing presence on the Tron network.
Tether (USDT), the first stablecoin in terms of market capitalization, is inching closer to its all-time high market cap of $83.2 billion.
Recent data from BitDegree reveals that Tether's market cap currently stands at approximately $83.06 billion.
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According to cryptocurrency market data company Kaiko, Tether's primary usage revolves around trading on centralized exchanges, where it controls 50% market share among stablecoin pairs.
In contrast, its presence on decentralized exchanges (DEX) accounts for only around 20% of the market. It is worth noting that the recent surge in Tether's market capitalization shows no correlation with trading volumes, raising eyebrows among industry experts.
Comparatively, Circle's USD Coin (USDC) stablecoin demonstrates a clear connection between trading volume and market capitalization. As USDC's trading volume declined, its market capitalization also decreased accordingly, highlighting the abnormality in Tether's market cap.
While factors such as the discontinuation of Binance's BUSD stablecoin and USDC's de-pegging event in March contributed to Tether's market capitalization growth, analysts assert that these explanations alone do not account for the over $15 billion increase since the beginning of 2023.
An intriguing aspect fueling Tether's upward trajectory appears to be its increasing presence on the Tron network.
It is worth emphasizing that Tether's supply on Tron surpasses that on Ethereum. Currently, Tron boasts a Total Value Locked (TVL) of $5.72 billion in DeFi applications. In contrast, Ethereum's TVL reaches $27.35 billion, spread across multiple protocols.
Analysts at Kaiko also discovered that several crypto exchanges, including Binance and OKX, hold outstanding USDT balances on the Tron network. This suggests that crypto market makers prefer Tron due to its lower transaction fees, contributing to the stablecoin's growth on the blockchain.
As Tether's market capitalization approaches its all-time high, the discrepancy between its rising supply and trading volumes raises questions within the cryptocurrency community. The growing presence of Tether on the Tron network, tied with its popularity among offshore exchanges, plays a significant role in driving its market cap upward.