How do we see the worth of Tether in 2025?

How do we see the worth of Tether in 2025?

How do we see the worth of Tether in 2025? Ideally, the tether should be worth $1 – that is what it is intended to do. A USDT price prediction from DigitalCoinPrice suggests it will still be $1.01 in 2025, while Gov. capital has an average tether price prediction of $3.75 for 31 December 2025.

In a world where forecasts suggest bitcoin will be worth anything between $0 and $1m in the coming years, the tether price prediction is rather soothing. However, that does not mean an absence of dramatic news.

USDT is what is called a stable coin. That is, it is designed to be pegged to the dollar, meaning that it constantly maintains a value of $1. Every unit that is in existence is fully backed by a traditional currency that is held in reserve.

Don’t let this stability fool you into thinking that the coin is dull, though. In 2021 we saw the number of people investing in the coin, and tether’s overall market cap, explode.

The size of tether has more than trebled since then, surging from $21bn on 1 January 2021 to more than $79.6bn at the time of writing.

The stablecoin has almost consistently managed to rank as the world’s third-largest cryptocurrency, behind bitcoin and ether. It is also the undisputed market leader when it comes to stablecoins, and is streets ahead of rivals such as USD coin, Gemini dollar and DAI.

On 20 January, following news of a potential Russian ban on cryptocurrencies, tether was the only coin that withstood a market ‘bloodbath’ that saw billions wiped off the value of market leaders bitcoin, ether and Solana. The following day, the launch of Tether’s new streamlined mobile-compatible website saw USDT trading volume increase by 125%, while the rest of the market continued to suffer

On 24 February, Russia started its invasion of Ukraine. As an immediate countermeasure against the rising inflation of its fiat currency, the Russian central bank doubled key interest rates on Monday, from 9.5% to 20%. As the dollar soared, tether witnessed a spike of more than 30% over the course of five days against the Russian rouble.

Amid growing concerns about fiat stability, tether’s trading volume increased by more than a third over the past 24 hours at the time of writing, according to CoinMarketCap

From the Tether white paper

Tether’s white paper states: “Common explanations for the current limited mainstream use of cryptocurrencies include volatile price swings, inadequate mass-market understanding of the technology and insufficient ease of use for non-technical users.

“Tether is based on the Bitcoin blockchain, the most secure and well tested blockchain and public ledger in existence. Tethers are fully reserved in a one-to-one ratio, completely independent of market forces, pricing, or liquidity constraints.”

How tether operates in the wider crypto market

So, what is the tether price prediction for 2022? And how is the tether prediction shaping up for 2025, 2030 and beyond? Well, assuming that it continues to remain popular among crypto investors, it is reasonable to say that the USDT price will still be $1.

We do need to ask how a coin whose value shouldn’t go up too much has increased its market cap over the past year. Well, USDT can offer a safe haven whenever the markets turn bearish, ensuring that crypto investors can exit their bitcoin positions without having to convert their capital back into fiat.

Supporters also believe that tether can have a powerful role when it comes to the remittances market, enabling dollars to be sent worldwide without punishing fees.

Tether also contributes to liquidity across the crypto markets and plays a crucial role in the blossoming decentralized finance (DeFi) sector. It is also worth noting that with the overall cryptocurrency market starting to rebound since recent crashes, more people are making use of tether as a way to trade their existing crypto assets for higher-priced coins. 

Tether reserves

Tether reserves

Another thing that may have helped tether to grow its market cap has been the issuing of an attestation report, telling current and potential investors what was in the crypto’s reserves, as well as an explanation of the ratings and maturity of Tether’s certificates of deposit (CD) and commercial paper (CP).

For what it’s worth, as of the paper’s release on 30 July, just under half the crypto’s reserves were in CP and CD, with around 93% rated A-2 and above and 1.5% below A-3. This news will have soothed the minds of traders who may have been concerned about the safety of the growing stablecoin. 

What is interesting is the way in which tether’s market cap has shot up. On 1 January 2021, it was around $21bn. Then, in keeping with the overall growth of the cryptocurrency market at the start of last year, it grew and grew, reaching $25bn on 26 January and $30bn on 10 February. One of the key points came on 3 April, when it reached $42bn.

That meant it had doubled its market cap in the space of a little over three months. The coin did not stop there, though, and the cap was $50bn by the end of the month. Even the events of 19 May did not really hurt tether. Its market cap went down from $58.43bn to $58.12bn from 19 May to 20 May, but it was soon back up, breaking through $60bn on 25 May. 

Market volume

One thing that did have an impact on the size of the market cap was when the tether itself took a break from minting new coins over June and July. The stablecoin’s cap barely moved during these months compared to earlier in the year, with its cap standing at $61.79bn on 1 June and $61.81bn on 31 July, up to $79.6bn at the time of writing on 28 February 2022.

Another metric to look at when it comes to tether is how much market volume it has. Interestingly, this went on a roller-coaster ride over the summer of 2021.

For instance, on 25 July, trading volume was $45.86bn, but the following day it more than doubled to $92.45bn. On 27 July, it was back down to $67.91bn and was below $50bn on 29 July before shooting back up to $58bn on 30 July and $67.36bn on 5 August. There was yet more growth and tether became the most-traded crypto in January 2022