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USDT replaced XRP once again, ranking third by market capitalization. Based on Skew’s data, it hit a new high of $ 18 billion. Above Coinmarketcap.com, Tether’s market capitalization is 0.13 billion less than 18 billion.
USDT market capitalization || Source: Skew
So is Tether taking on the popular XRP altcoin or is it just a record surge in the new question? By the end of June 2020 Tether had surpassed $ 10 billion, surpassing XRP for the first time, however, XRP caught up fairly early and recovered its position. If this is repeated, XRP expects a more than 40% increase in market capitalization to catch up with Tether. Tether’s growth is driven primarily by demand. And looking at Bitcoin’s ongoing price hike and weekly returns on the top 10 cryptocurrencies based on market cap, it’s safe to assume that the main contributing factor to this market cap is new demand. Over the past 3 months, the number of active Bitcoin addresses has increased by more than 5% according to data from CoinMetrics.
Number of active BTC addresses || Source: CoinMetrics
With the smart money flow backdrop, demand on spot exchanges is increasing and this could be a major contributor to Tether’s increasing market cap. Furthermore, Tether was already experiencing a larger trading volume than Bitcoin in recent months. As Bitcoin left exchanges and moved to private wallets, reserves fell and Tether’s trading volume and market cap both increased significantly. For Bitcoin, Tether may not represent the competition, despite exceeding it in trading volume, however, can the same be said for XRP?
In 2017, XRP was one of the most popular altcoins for transferring funds from one exchange to another in the arbitrage community. This was partly due to the speed of transactions and partly to low fees. However, Tether has nearly replaced XRP with its high trading volume, as it is popular for cross-border fund transfers and deals. XRP may have established a number of partnerships to remain relevant. Tether, however, with its large market capitalization and deep entrenchment in spot trading across high-volume markets, has grown enough to reach $ 18 billion. Whether this presents a challenge to XRP or not will be known in a few weeks, looking at XRP’s market cap and price action.
