Tether Market Cap Crosses $30 Billion After Tesla Announcement
- Tether’s market cap is now at $30.3 billion, a bullish indicator for BTC price.
- The news comes the day after Tesla’s announcement of a $1.5 billion investment in Bitcoin.
- Tether remains a controversial project with a lack of transparency surrounding its collateral reserves.
Institutional and corporate investment has led to significantly higher Tether inflows, pushing the stablecoin’s market cap across the $30 billion milestone.
Tether Marks the Bull Run
The USDT market cap is now at $30.3 billion, with Tether ranked third by market cap in the crypto space.
Notably, the surge in USDT inflows came one day after Tesla CEO Elon Musk announced a $1.5 billion investment in BTC. As the richest man in the world, Musk’s open advocacy of Bitcoin as a hedge against cash inflation carries weight in the corporate world.
While already interested in Bitcoin personally, Musk may have drawn inspiration for his corporate investment strategy from MicroStrategy CEO Michael Saylor after the two discussed in December.
Saylor was motivated to explore Bitcoin as a way to hedge against inflation following the record increase in the supply of the U.S. dollar following the COVID-19 crisis and resulting stimulus programs.
With many other corporations and institutions following after, the demand for a stablecoin with which to time market entry has risen sharply, painting Tether inflows as a key indicator for the BTC bull run’s health.
A Controversial Project
Tether is the most dominant stablecoin and claims to be the most liquid by far.
It’s worth noting that while Tether is supposedly backed 1:1 by USD reserves, audits in the past have shown that this is not entirely true. There is no way to know that the project truly has one dollar to back each Tether that has been minted, and Tether once broke off its relationship with the Friedman LLP auditing firm.
In 2019, the New York attorney general filed an injunction against iFinex, alleging that its subsidiaries Tether and Bitfinex siphoned Tether reserves to cover an accidental loss of funds amounting to $850 million. In the latest, the company has soothed the market by paying off this loan.
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