Tether's USDT stablecoin is approaching a significant milestone, with its market capitalization edging close to $100 billion.

According to CryptoSlate's data, the digital asset currently holds a market capitalization of $99.5 billion, marking a 9% increase on the year-to-date metric.

This surge follows the recent creation of 1 billion USDT by the Tether Treasury. On March 3, Whale Alert reported this notable activity, with the Tether Treasury generating an additional 1 billion USDT, valued at around $999 million.

In response, Tether CEO Paolo Ardoino clarified that the newly minted USDT aims to replenish the Ethereum network. He explained that this freshly created USDT will be used as inventory for upcoming issuance requests and chain swaps.

"PSA: 1B USDt inventory replenish on Ethereum Network. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps," Ardoino elaborated.

Ardoino further stated to CryptoSlate,

"Surpassing the $100 billion market cap is not just a numerical achievement; it’s a testament to Tether’s pivotal role in reshaping the landscape of digital finance…

As we celebrate this historic milestone, we remain committed to driving innovation, pushing the boundaries of what’s possible, shaping a more equitable and accessible financial future for all, and being unstoppable together."

Reasons behind Tether’s market cap growth

The increasing market capitalization of Tether mirrors the growing demand for the stablecoin among investors seeking entry into the crypto market.

With the approval of multiple Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission, institutional and retail interest in the crypto space has surged, especially considering BTC’s price reaching previous highs and the potential for further gains.

Additionally, Tether is experiencing significant demand from developing nations like Nigeria, where citizens are turning to it as a hedge against the volatility of their national currencies, which often undergo frequent devaluations.

Moreover, Tether's expanding market capitalization can be attributed to its integration with the Tron network. Data from DeFillama indicates that over $50 billion USDT are in circulation on Tron, surpassing the $40.2 billion on Ethereum.

These figures suggest that market makers and large investors prefer the Justin Sun-linked network due to its lower transaction fees.