The world’s most valuable stablecoin, USDT, issued by the company Tether, acts as a bridge between fiat money and cryptocurrencies. For this reason, there is a high correlation between USDT and the price of Bitcoin (BTC), the main digital currency.
Bitcoin investors typically trade through USDT, which means a rise in bitcoin price also boosts USDT market cap, indicates the trader and market analyst who spreads his work under the pseudonym ‘Real Investments’.
Tether ensures that each USDT is backed by reserves, and a significant portion of these is invested in short-term US Treasury bills.
Last October, Tether revealed that its direct and indirect exposure to these bonds amounts to $102.5 billion. This makes the company one of the 18 largest holders of US debtsurpassing countries like Germany and Australia.
USDT has a current USDT market capitalization at $132 billionas seen in the following graph of TradingView. The stablecoin is mostly backed by Treasury bills and other tradable assets.
USDT market capitalization. Source: TradingView.
Owning such a large amount of Treasury bonds makes Tether, perhaps inadvertently, a significant financial ally for the US government, which is facing a growing budget deficit.
The rise of bitcoin as an economic strategy
For everything explained up to this point, then, the relationship between the increase in the value of bitcoin and Tether’s growth has profound implications for the US debt market.
Over the past 100 years, the US federal debt has increased from $395 billion in 1924 to $35.46 billion in 2024as seen in the following Fiscal Data chart.
Evolution of the national debt of the United States. Source: https://fiscaldata.treasury.gov/
According to analyst Real Investments, The US government could benefit from the continued rise of bitcoinsince this phenomenon increases the demand for USDT.
In turn, this makes Tether a key buyer of Treasury bills, at a time when bond auctions face low demand.
The United States increasingly relies on issuing short-term debt to cover its fiscal deficit. In the first quarter of 2024 alone, the Treasury borrowed 748 billion dollars in marketable net debt, and this figure is expected to increase to 823 billion in the same period of 2025.
For example, if bitcoin rose to $200,000 per coin, Tether’s market cap could double to reach $260 billion.
“And if the company keeps its promise to buy more Treasury bills, almost all of the excess debt of $150 billion can be purchased, which would be a great relief for the United States government,” says the analyst.
Trump’s support for cryptocurrencies
President-elect Donald Trump seems willing to reinforce this dynamic. During his campaign, Trump promised to promote cryptocurrenciesincluding the possible creation of a Strategic Bitcoin Reserve (SBR).
He also raised the formation of an advisory board to establish regulatory guidance that benefits the entire industry.
Howard Lutnick, CEO of Cantor Fitzgerald and Trump-appointed Commerce Secretary, is trading directly with Tetheras reported by CriptoNoticias.
This dialogue seeks to secure support for a multi-million dollar loan program, backed by bitcoin as collateral. Cantor Fitzgerald already acts as custodian of the Treasury bonds backing USDT, consolidating a strategic relationship that could deepen under the Trump administration.
Risks and future prospects
Although the rise of bitcoin benefits the US debt market, A significant drop in its price could indirectly impact Tether.
However, the design of the stablecoin, backed by assets such as Treasury bonds, protects its value against the volatility of the Cryptocurrency market. Furthermore, during bitcoin crashes, Investors tend to take refuge in USDT, increasing its demand and stabilizing its capitalization.
Real Investments warns that no investment is guaranteed to grow indefinitely. However, in the short term, the synergy between bitcoin, USDT and the US government offers an attractive solution to manage the fiscal deficit, indirectly encouraging the rise of bitcoin.
Backed by a favorable administration and an expanding cryptocurrency market, the rise of bitcoin appears not only inevitable, but also strategically beneficial for the United States government.
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