Tether could overtake Ethereum as the second most valuable cryptocurrency by the end of next year, while Bitcoin is expected to test the $14,000 level before the end of the year
Tether is set to replace Ethereum as the number two in the sector in terms of market cap, according to the Bitcoin Trend report by Bloomberg.
The financial media outlet stated that if the demand for Bitcoin and stablecoins continues, Tether’s market cap could surpass Ethereum by the end of next year. Although Bitcoin is expected to retain its position as the number one, Ethereum will give way to Tether (USDT).
Tether has already overtaken several other cryptocurrencies over the past few years. USDT is currently the third most valuable cryptocurrency by market cap after overtaking XRP, Bitcoin Cash, Binance Coin (BNB) and a host of others.
To back its point, the report cited the Ethereum market cap that stagnated around $30 billion for most of 2019 and 2020 before getting a boost by the DeFi hype in the last quarter to currently stand at around $43 billion.
USDT has seen its market cap grow steadily since 2017 despite the bear trend affecting the general cryptocurrency market. Tether’s market cap at the start of the year was $4.1 billion, but is now closing in on $16 billion.
Bloomberg believes the rapid rise in stablecoins adoption will pave the way for developing and adopting central bank digital currencies (CBDCs). Bloomberg analysts added that it would take something special to stall the increasing adoption of USDT, the leading stablecoin.
Bitcoin could test the $14k level this year
According to the report, the Bitcoin demand indicators show that the cryptocurrency could revisit the 2019 high of $14,000 before the end of the year. “Some of the leading Bitcoin demand indicators point to revisiting the 2019 high around $14,000, potentially this year,” Bloomberg wrote.
The rising Bitcoin market cap is increasing demand for the cryptocurrency. The report cited the massive investment by MicroStrategy as an indication that the mainstream adoption of Bitcoin is on the rise.
“At less than $200 billion, the Bitcoin market is too small for many large institutions, including central banks, to add the crypto as part of their holdings, but if the market cap of Bitcoin increases, it becomes increasingly like a digital version of gold,” the report added.
The market cap of Bitcoin could rise astronomically over the coming years. A new Fidelity report revealed that Bitcoin’s market cap has room to grow, describing its current state as a ‘drop in the bucket’. Fidelity researchers believe that institutional investors’ entry could see Bitcoin disrupt several markets and increase market cap massively.