Tether’s USDT, the leading stablecoin, has hit the market capitalization of $160 billion for the first time. This achievement, detailed in Tether’s latest transparency update, underscores a period of robust growth for the veteran issuer, significantly bolstered by substantial profits from its U.S. Treasury holdings. Tether reported over $1 billion in operating profit in Q1, continuing a growth trajectory that began in late 2022.
Tether CEO Paolo Ardoino celebrated the “mind-blowing milestone” on X on Wednesday, emphasizing USDT’s crucial role as the “digital dollar for billions of people living in developing countries.” This new high follows USDT’s previous crossing of the $150 billion mark in May.
According to The Block’s data dashboard, Tron has once again surpassed Ethereum to host the largest supply of USDT. Tron currently holds approximately $81 billion worth of USDT, while Ethereum accounts for around $65 billion. USDT’s popularity on Tron stems from its low fees and rapid transactions, making it a more accessible alternative for cross-border payments and dollar savings in emerging markets. Other networks host significantly less USDT, with BNB Chain at $6.8 billion, Solana at $2.3 billion, and Polygon at $1.1 billion.
Tether’s attestations show that cash and cash equivalents, primarily short-dated U.S. Treasurys, constitute the majority of USDT’s backing reserves at 81.5%, with Bitcoin representing 5.1%. Earlier this year, Ardoino stated that over 400 million people globally use USDT, with an impressive growth rate of 35 million new wallets per quarter, predominantly in developing countries, thereby strengthening the U.S. dollar’s global presence. As of Q2, Tether holds over $127 billion in U.S. Treasurys, making it the 18th largest holder, on par with sovereign nations like South Korea, the UAE, and Germany.
Analysts at Bernstein predict a transformative future for stablecoins, envisioning their evolution from mere crypto market infrastructure to the “money rail of the internet.” They project the total stablecoin market cap to surge sixteen-fold to $4 trillion over the next decade from its current $249 billion. This monumental growth is expected to be driven by significant expansion in crypto and tokenized capital markets, payments, and stablecoin-native financial services.
While Circle’s USDC is poised to become the largest regulated stablecoin under the recently passed GENIUS Act in the U.S. Senate, granting it a “regulatory headstart,” Bernstein forecasts that Circle will capture only about 30% of this potential $4 trillion market, a modest increase from its current 25% share. Tether’s USDT is expected to maintain its dominant position with approximately 65% market share. Tether has indicated it may establish a new U.S. subsidiary to ensure compliance with any new stablecoin legislation.
With a lean team of fewer than 200, Tether generated an estimated $13 billion in profit in 2024 and currently holds over 100,000 BTC ($11.8 billion). The company has been aggressively expanding its investments beyond stablecoins into diverse sectors such as artificial intelligence, telecommunications, data centers, energy infrastructure, and Bitcoin mining.
In a recent podcast, Ardoino asserted that Tether aims to become the “biggest bitcoin miner” by the end of 2025. He also made bold predictions, including one trillion AI agents using Bitcoin and USDT for transactions within 15 years, and claimed that a Tether-backed brain-computer interface is already “much more advanced” than Elon Musk’s Neuralink.
