Here's why Tether could overtake Ethereum by 2021

Tether, the world's largest stablecoin by market cap, could reach a valuation higher than Ethereum in 2021, the latest issue of Bloomberg's Crypto Market Outlook suggested in a report earlier this month.

Governments around the world are similarly considering their own state-backed digital currencies, which can increase the demand for Tether, the report said.

At press time, the USDT is valued at nearly $16 billion and accounts for over 4% of the total crypto market cap.

Ethereum, in contrast, sits on a $43 billion market cap at press time.

Mike McGlone, a senior commodity strategist at Bloomberg and author of the report, noted that the importance of USDT is growing as the stablecoin performs an increasingly vital function within the digital asset ecosystem.

He stated, "[The] USDt plays a pivotal role in the trading of digital assets resulting in many digital asset spot exchanges now denominating trading pairs in Tether rather than Bitcoin.

"Tether represents what many of the so-called cryptocurrencies aren't: a stable form of payment," the report stated.

"As the most stable, liquid, and trusted stablecoin, it is powering so much innovation in crypto at the moment. Tether is lubricating many of the powerful protocols that Ethereum has given birth to, such as those in DeFi. Of course, we don't see ourselves as competing with Ethereum."

On Tether's position in the market alongside Bitcoin, Arduino said the team sees the USDT as a "Complement to Bitcoin rather than a competitor."

Tether is driven to support and empower growing ventures and innovation in the blockchain space.