PriyankaWe have recently put together an exhaustive list of the 12 Best Cryptocurrencies to Invest in According to Reddit. This article delves into Tether (USDT) and its standing amidst other cryptocurrencies in today’s dynamic market.
The past year has been nothing short of a roller coaster for cryptocurrency investors. The initial approval of spot Bitcoin ETFs in the first quarter set the stage for a transformative year. This milestone led to a ripple effect, with markets gradually absorbing the news that the SEC was also paving the way for spot Ethereum ETFs, which got their green light by May. Consequently, spot Bitcoin ETFs amassed over $50 billion in combined assets within just six months, making it one of the most successful ETF categories ever launched according to market experts.
In addition to spot ETFs, crypto-themed ETFs showed remarkable performance in the first half of 2024. For instance, the First Trust SkyBridge Crypto Industry & Digital Economy ETF experienced a robust growth of approximately 20% on a year-to-date (YTD) basis. Blockchain-centric products also captured significant interest, with the Amplify Transformational Data Sharing ETF rising by over 19% YTD.
The integration of Artificial Intelligence (AI) into the crypto realm has been another significant development in recent months. AI tokens, representing cryptocurrencies associated with AI ventures, are designed to support AI-driven projects, applications, and services. These tokens facilitate decentralized AI marketplaces and AI-powered decentralized autonomous organizations (DAOs). Users can employ these tokens to pay for services or access data, while platforms utilize them as incentives or to grant governance rights. CoinMarketCap noted that the market cap for AI and big data cryptocurrencies surged by more than 70% in a few weeks, reflecting renewed investor confidence.
The crypto industry has faced its share of challenges, such as the high-profile collapse of FTX, which underscored the urgent need for regulatory oversight. The downfall of this leading exchange was largely due to the lack of regulation at that time. However, government bodies have since become proactive in enforcing rules. The U.S. Securities and Exchange Commission (SEC) has emerged as a vigilant watchdog, initiating legal actions against several crypto companies.
CNBC reported that the United States has been one of the most active regulators, with the SEC suing two major crypto exchanges. Clear regulatory standards could pave the way for institutional investors like banks and asset management firms to venture into crypto assets.
A bi-annual survey by KPMG in Canada and the Canadian Association of Alternative Assets and Strategies (CAASA) revealed that about 22% more financial services organizations offered crypto-asset products and services to their clients in 2023 compared to 2021. Additionally, institutional investors incorporating crypto-related assets into their portfolios rose by approximately 26% over the same period.
Coinbase highlighted that updated second-quarter 2024 13-F filings indicated a significant increase in institutional inflows into U.S. spot Bitcoin ETFs. According to Coinbase, this uptick is a promising indicator for the Bitcoin market. The filings showed that institutional ownership of such ETFs increased from 21.4% to 24% between Q1 and Q2 of 2024.
According to the United States International Trade Commission, global revenues from tokenized asset exchanges amounted to around $26.5 billion in 2022, with approximately 76% derived from cryptocurrencies.
The surge in revenues from tokenized assets in 2021 was driven by growth in non-fungible tokens (NFTs) and rising prices of major cryptocurrencies. McKinsey projects that total tokenized market capitalization could reach around $2 trillion by 2030, excluding leading cryptocurrencies and stablecoins. This growth is expected due to adoption by mutual funds, bonds, exchange-traded notes (ETNs), loans, securitization, and alternative funds.
Globally, the cryptocurrency market capitalization surpassed $2.5 trillion according to Forbes, with Bitcoin alone reaching a market cap of $1.4 trillion in mid-March 2024. The cryptocurrency market is projected to hit around $6.6 billion by 2024, with user numbers expected to rise to 107.30 million by 2025.
The primary drivers for this growth include higher acceptance and adoption of cryptocurrencies by both institutions and individuals, increased usage of decentralized finance (DeFi) platforms, advancements in blockchain technology, and greater use for cross-border transactions.
Our Methodology
We explored various communities, subreddits, and threads to compile our list of the top 12 trending cryptocurrencies. These were ranked based on their market capitalization as of August 29.
At Insider Monkey, we focus on stocks favored by hedge funds because our research shows that emulating top hedge fund stock picks can help outperform the market. Our quarterly newsletter strategy, which selects 14 small-cap and large-cap stocks each quarter, has returned 275% since May 2014, outperforming its benchmark by 150 percentage points.
A close-up of a cryptocurrency mining rig in a large warehouse facility.
Market capitalization as of August 29: $118.1 billion
Tether (USDT), launched in 2014 as a blockchain-enabled platform, was designed to facilitate the use of fiat currencies in digital form. It aims to disrupt traditional financial systems by offering a modern approach to money transactions. Tether allows users to transact with traditional currencies on the blockchain without facing the inherent volatility and complexity associated with digital currencies. It operates as a digital dollar powered by blockchain technology—a stablecoin pegged 1:1 to the USD.
Tether tokens are built on various leading blockchains including Algorand, Avalanche, Bitcoin Cash’s Simple Ledger Protocol (SLP), Ethereum, EOS, Polygon, Tezos, Solana, Kava, and Statemine. These transport protocols use open-source software interfacing with blockchains for issuing and redeeming Tether tokens. Tether ensures its tokens are fully backed by reserves.
What sets Tether apart is its guarantee to maintain its value pegged to the US dollar. When new USDT tokens are issued, an equivalent amount in USD is allocated to its reserves, ensuring full backing by cash and cash equivalents. In May 2022, Tether expanded into Latin America with MXNT—a new stablecoin backed by the Mexican peso—following earlier launches of USDT, EURT, and CNHT stablecoins pegged to the U.S. dollar, euro, and Chinese yuan respectively.
Tether transactions are rapid and straightforward, offering a clear advantage for crypto investors and traders who can complete transactions within minutes without any exchange conversion fees.
Overall USDT ranks third on our list of best cryptocurrencies to invest in right now. While we recognize its potential as an investment vehicle, we believe some deeply undervalued AI stocks offer higher returns in a shorter timeframe. For those seeking a promising AI stock trading at less than five times its earnings, we recommend checking out our report on the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
