In a recent interview with CryptoPotato during the 2024 Token2049 Dubai Conference, Tether’s CEO, Paolo Ardoino, spoke about AI, the Bitcoin halving, the recently-launched ETFs, USDT’s market share, and much more.
Ardoino, who is also the CTO of BitFinex, believes stablecoins, such as USDT, are made for the unbanked and not for developed countries like the US.
Bitcoin ETF/Halving Impact
The interview was conducted mere hours before the fourth halving took place (which was in the early hours of April 20), and Tether’s chief exec agreed with previous assessments by CryptoQuant that the effects of the event are diminishing in time.
This is because more than 19.5 million BTC have already been mined, and the reduction in block production is less impactful now than it was when it was slashed from 50 BTC to 25 BTC.
Additionally, he noted that the halving is a known event that people see coming and are preparing in advance for it. Consequently, he asserted that there is a big chance the halving might have already been priced in, especially given the fact that bitcoin soared to an all-time high ahead of it this time around.
However, Ardoino sees the spot ETFs, which were launched in the US in January this year, as the most bullish development within the cryptocurrency ecosystem. According to BlackRock’s CEO, Larry Fink, mostly retail investors have been pouring funds into the ETFs for now, and the institutions are yet to enter the scene.
Ardoino said even 1-2% of large traditional hedge funds and other institutions could propel more significant price increases for BTC. He added that spot ETFs in the States have made it a lot easier for retail investors, who lacked the knowledge, interest, or trust to buy bitcoin from crypto exchanges until now, to accumulate the asset.
Although he agreed that ETFs make it easier for people to begin their bitcoin journey, he also noted that these products have a somewhat negative effect. When people purchase shares of a spot ETF, they act in the opposite manner of what Maxis believes: that bitcoin HODLers should store their own assets outside of centralized entities.
Yet, all of that can change should newbies use the ETFs as an entry point and start educating themselves on the actual benefits of the world’s largest cryptocurrency instead of just aiming for quick profits.
“The vast majority of people still think in Euro terms of US dollar terms. So they just want to make gains on that side rather than hold the most beautiful currency in the world.”
Tether Competition and ETF Impact
Ardoino refuted previous rumors that the approval and launch of spot Bitcoin ETFs will result in less interest in USDT and other stablecoins. Just the opposite, he said USDT’s market cap has skyrocketed by about $20 billion since January and is around $110 billion now.
Trading volumes on Bitfinex, a crypto exchange mostly serving institutional investors, have also grown significantly in the past 6 to 12 months after the ETFs went live.
In terms of competition for Tether’s stablecoins, particularly the recent emergence and rapid growth of Ethena’s USDe, the exec said there could not be a stablecoin industry if they were the only players in it.
He believes competition is good, but people should know the differences between all stablecoins, as they are not created equal.
While many newly launched stablecoins go for DeFi, Tether’s goals are different:
“Tether doesn’t care about DeFi. Tether is used in DeFi, but it’s not our primary use case for sure. We believe our primary use case is emerging markets in developing countries, people that need to have access to the dollar and that are left behind by the traditional financial system.”
AI and the Future
Tether has already dabbled with a few AI-related initiatives in the past several months, and Ardoino said this trend is likely to intensify in the future. He explained that the company uses only its profits to invest in AI projects.
For instance, Tether made $6 billion in 2023 and used about 10% of that to allocate to different AI investments. At the same time, the remaining $5.4 billion was used to strengthen the stablecoin reserves further, something the firm had been criticized for in the past.
Most recently, Tether expanded two of its largest stablecoins to TON’s blockchain, and there are already more than 30 million USDT on the network.
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