This wallet growth showcases Tether’s market dominance. Regulatory approval in Abu Dhabi further positions Tether-issued USDT as the leading stablecoin.
Retail Users Propel Tether’s Growth
According to on-chain data, Tether’s remarkable rise continues, with USDT wallets soaring to 109 million by the start of Q4 2024. This rise makes it one of the most used digital assets, alongside Ethereum, and ahead of Bitcoin in wallet count.
Centralized platforms have been key to this growth, with over 86 million accounts receiving Tether deposits on these platforms. Emerging markets account for the highest USDT deposits, driving nearly half the 4.5 billion visits to centralized exchanges in the first three quarters of 2024.
Residents in these regions use USDT for savings and transactions to enable them to navigate the region’s economic difficulties.
Tether Wallet’s Year-on-Year Growth
The rise in wallet count in the last twelve months showcases Tether’s steady expansion across diverse user demographics. The wallet numbers have increased by 45% compared to the previous year, driven primarily by retail adoption.
A recent study showed that there were 18.7 million wallets with balances under $1 during the period under review, reflecting the coin’s accessibility to low-income users. Moreover, 31.5 million wallets holding balances between $1 and $1,000 show USDT’s utility for everyday financial needs.
In addition, over 1 million wallets hold balances above $1,000, with the majority holding between $1,000 and $10,000. This distribution proves that USDT serves users across income levels.
The study further revealed that about 30% of smaller wallets are periodically reactivated, hinting at Tether’s reliability for users returning to it when financial resources permit.
Regulatory Milestone Strengthens Tether’s Market Presence
In a related development, the Financial Services Regulatory Authority at Abu Dhabi Global Market has recognized Tether as an Accepted Virtual Asset, or AVA. This approval will permit USDT’s use in regulated financial services by UAE Licensed Financial Service Providers.
This recognition applies to USDT issued on multiple blockchains, including Ethereum, Solana, and Avalanche. Market capitalization for USDT tops $138 billion, making it the largest stablecoin.
The UAE’s proactive approach toward digital finance makes it a global hub for fintech innovation.
Tether Plays a Key Role in Bridging Digital Assets and Traditional Finance
The growing number of regulatory clearances obtained by Tether shows its role in connecting traditional finance with the digital asset market. Nevertheless, the stablecoin issuer is still a subject of regulatory scrutiny in some jurisdictions.
For instance, the US Financial Stability Oversight Council cited concerns about stablecoin’s market concentration and possible systemic risks. Hence, it suggested additional risk management practices and added regulatory oversight for the leading stablecoin issuer.
Market Impact and Growth Projections for Tether
In November, Tether minted more than 5 billion USDT in 72 hours, while its market cap jumped from $124 billion to $138 billion in mid-December. This jump coincided with Bitcoin reaching an all-time high price of $76,200, further demonstrating the USDT issuer’s importance in providing liquidity and stability to the volatile crypto market.
This surge reflects Tether’s fast response to market demand to ensure adequate liquidity for global transactions. The move has reinforced its reputation as a cornerstone of the crypto ecosystem.
Projected Growth and Competitive Landscape
Analysts expect the USDT wallet count to increase yearly by at least 20%, driven by adoption in emerging markets and increasing integration into regulated financial systems. With its integration into centralized exchanges and decentralized platforms, USDT remains indispensable in the evolving crypto landscape.
Furthermore, the USDT’s growth is fueled by its accessibility and reliability, especially among retail users. On-chain data indicates that users with modest financial resources rely on USDT for daily transactions and savings.
The stablecoin’s resilience during market disruptions, including events like the FTX collapse and challenges rival stablecoins face, proves its reliability. Users’ prioritization of security and self-custody further cements Tether’s status as a preferred financial asset.
CoinGecko data shows a 13% spike in stablecoin’s market cap in the last 30 days, suggesting increasing demand for these fiat-pegged cryptocurrencies.
