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The price of Bitcoin (BTC) just soared to $65,000, and Tether USDT reached a historic capitalization of $100 billion.

The price of Bitcoin (BTC) has just reclaimed the $65,000 mark as it continues to rise over the past few weeks. With prices rising 5.4% over the past 24 hours, Bitcoin’s price and market capitalization are now pegged at $65,516.87 and $1,277,114,159,326, respectively.

Bitcoin’s current rally can easily be attributed to FOMO – fear of missing out – among institutional investors, but it is being significantly fueled by the spot BTC ETF. Since the SEC gave the product the green light in January, over 300,000 BTC has been purchased by all participants so far. The introduction of this spot Bitcoin ETF changed the paradigm in the market as a whole and created a massive supply shortage. Currently, only about 900 BTC is mined per day, and this compares to the average of 10,000 BTC purchased by spot Bitcoin ETF issuers overall. This supply and demand imbalance may also worsen in the coming weeks as the upcoming Bitcoin halving event will reduce the supply of Bitcoin by 50%. If demand continues by then, the Bitcoin world as a whole will likely see more parabolic price increases.

Bitcoin is currently several bullish candles away from breaking through its all-time high (ATH) of $68,789.63. If the bullish momentum continues, there is a chance that the digital currency will break this level this week. Experts are optimistic that this price level is quite low compared to what BTC is actually worth if the supply shortage is properly assessed. Veterans are optimistic that Bitcoin can indeed soar to the $1 million high in the long term. While there may be inevitable corrections along the way, Bitcoin in particular has the right fundamentals to support current growth projections for the foreseeable future.

Amid this backdrop of Bitcoin’s rise, crypto stablecoin Tether (USDT) has reached an all-time high market capitalization of $100 billion, according to CoinGecko, posting 9% year-to-date growth and widening the gap with its next-largest competitor, USD Coin (USDC). On the other hand, Tether has not yet crossed the $100 billion mark according to other data sources such as CoinMarketCap. Tether’s market capitalization is on par with British oil and gas giant BP and slightly above e-commerce giant Shopify. According to the Tether website, it is a cryptocurrency pegged to the price of the US dollar, available on 14 blockchains and protocols. It is also the third-largest cryptocurrency by market capitalization after Ethereum (ETH), and has come to play a key role as a blockchain-based option for crypto traders looking for an asset pegged to the US dollar.

Over the past month, the cryptocurrency market has returned to a market capitalization above $2 trillion, with the price of Bitcoin (BTC) rising 50% to a two-year high. The company that issues the token, Tether, claims to back each USDT 1:1 with its verified, independent reserves, primarily consisting of U.S. Treasury Bills (T-Bills), a short-term loan provided to the U.S. government. In the fourth quarter of 2023, the company reported a record quarterly profit of $2.85 billion, of which $1 billion came from its Treasury bills. Its fourth-quarter report said it had more than $80 billion in Treasury bill assets, and the company has said in the past that it is one of the world’s largest buyers of U.S. government debt.

The quality of the assets backing USDT has been a concern in the crypto space, and Tether has made efforts to reduce the volumes of some assets considered riskier. At the end of 2022, Tether promised that it would stop lending from its reserves by the end of 2023. Those plans never came to fruition: Tether had $4.8 billion in loans at the end of 2023, although that was about $1 billion less than at the start of the year. The company says the loans are fully collateralized and has promised to cut them to zero in 2024. More than half of the USDT currently issued is on the Tron (TRX) blockchain, which a January United Nations report said has “become the preferred choice” for cyber fraud and money laundering in Southeast Asia. Tether responded to the report by saying the UN made no mention of the company’s cooperation with law enforcement and the token’s traceability.

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