Tether's market cap could overtake Ethereum's next year

A new report predicts Tether could surpass Ether's market cap by the end of next year, paving the way to mainstream adoption of stablecoins and central bank digital currencies.

According to Bloomberg's Crypto Outlook report for Q4 2020 written by Senior Commodity Strategist Mike McGlone, Tether is likely to take the number two position by market capitalization from Ether in 2021.

The report cited the "Stagnant market cap" of ETH, which currently stands at $43.2 billion but remained under $30 billion for most of 2019 and 2020, before getting a boost from DeFi in late July.

USDT's market cap, on the other hand, has seen steady growth since 2017, with just one significant dip in October 2018.

The stablecoin began 2020 with a market capitalization of $4.1 billion, "Rapidly rising" to $15.7 billion in October.

"If current trends prevail, the market cap of Tether may surpass Ethereum next year."

Crypto pioneer Adam Back told his 211,500 Twitter followers on Oct. 11 that Bitcoin is "The only benchmark that matters" as he believes the majority of investor portfolios are denominated in the cryptocurrency.

Bitcoin is the unit a account already, for crypto traders.

Though the report suggests the demand for Tether indicates that the arrival of central bank digital currencies is simply "a matter of time," it also predicts a bullish future for Bitcoin.

"Bitcoin could continue doing what it has for most of its nascent existence, appreciating in price on the back of increasing adoption, but at a slower pace," the report stated.