Odaily Frontline｜Bloomberg Report: Tether's market value may surpass Ethereum next year

This article comes fromCointelegraph, by Turner Wright

Odaily Translator |

Odaily Translator |

A new report predicts that Tether’s market capitalization could surpass that of Ethereum by the end of next year, paving the way for mainstream adoption of stablecoins and central bank digital currencies (CBDCs).Written by Mike McGlone, Senior Commodity Strategist, BloombergQ4 2020 Crypto Outlook Report

It shows that in terms of market capitalization, Tether (USDT) is likely to replace Ethereum (ETH) in 2021 to become the world's second largest cryptocurrency. The report noted ETH’s “stagnant market capitalization,” which currently sits at $43.2 billion, remained below $30 billion for most of 2019 and 2020 before getting a DeFi boost in late July.

On the other hand, the market value of USDT has grown steadily since 2017, and only experienced a sharp decline in October 2018; since the beginning of 2020, its market value was 4.1 billion US dollars, and it "rapidly rose" to 15.7 billion US dollars in October.

McGlone said, "Some important steps need to be taken to prevent more and more people from adopting Tether. If the current trend continues, Tether's market value may surpass Ethereum next year."Not everyone in the crypto community will appreciate this prediction. On Oct. 11, crypto pioneer and Blockstream CEO Adam Back told his 211,500 Twitter followers,Bitcoin is the "only benchmark that matters"

, because he believes that most investors’ portfolios are denominated in cryptocurrencies.

“Bitcoin is already the unit of account for crypto traders. Most portfolios are denominated in Bitcoin. This is the only benchmark that matters, you want to know if your long/short/option/yield/altcoin trading strategy is better Or worse, or you can hold. Not Hodl is a risk.”

Back said, “I use stablecoins, but I don’t hold them much because it’s shorting Bitcoin. Any strategy that doesn’t involve holding Bitcoin has a high risk of underperforming Bitcoin.”

While the Bloomberg report suggests that demand for Tether suggests that the arrival of a CBDC is only a “matter of time,” it also predicts a bullish outlook for Bitcoin.

According to the report, by 2025, BTC will rise from the current $11,448 to $100,000. With a fixed token supply of 21 million tokens, “the metric of demand vs supply remains positively price-correlated,” the report said.

“Bitcoin can continue to function through most of its nascent life, with prices increasing, but at a slower pace, on the back of increasing adoption,” the report states.