The latest Bloomberg report that has provided a crypto outlook for June says that Tether can pass Ether and hold the second spot on the strength of the dollar. The outlook report suggests that Tether (USDT) will surpass Ethereum (ETH) in market capitalization.
Based on the same report, the growth of Tether’s market capitalization is a crucial driver for the recent appreciation of Bitcoin (BTC):
“Interest in digital links to the dollar represents the need to transact; and store value in the world’s reserve currency without an intermediary.”
Ether Is Bitcoin’s Shadow
Tether has recently overtaken XRP at the number three spot based on market capitalization. Bloomberg alleges that it will not stop at the third spot but will surge towards Ether and eventually take the second spot:
“Absent an unlikely reversal in predominant crypto trends; it should be a matter of time until Tether passes Ethereum to take the No. 2 spot in total assets behind Bitcoin. Benefiting from widespread adoption with a viable case as a proxy for the world’s reserve currency; there seems little to stop the increasing adoption of the dollar-linked stable coin.”
Simultaneously, the report contends that Ether lives in Bitcoin’s shadow and does not have any formidable buoyancy of its own:
“We see little upside in the ETH price absent a rising tide from Bitcoin. The pre-eminent crypto is breaking away from the pack in terms of adoption and is supported by almost-ideal macroeconomic conditions for stores-of-value amid quantitative easing.”
Tether Riding On The Dollar
Despite the massive US stimulus package, the dollar seems to keep appreciating against other major currencies. Thus, stablecoins, including Tether that is pegged and provide access to the dollar, are gaining traction as well, according to the Bloomberg report.
Both Tether and Bitfinex have recently been affected by legal issues that may pose significant challenges to their future success.