The closing of the crypto markets in 2024 was marked by considerable uncertainty, particularly concerning Tether (USDT). Speculation about Tether’s adherence to Europe’s MiCA regulations sparked discussions about a potential market downturn. However, industry expert Michael Van de Poppe offers a different perspective, suggesting that the concerns might be exaggerated.
Understanding Tether’s History and Financial Strength
Tether has often been a subject of skepticism, facing accusations of being a “bubble” or engaging in opaque financial practices. Despite such criticism, Tether displayed significant financial resilience, reporting over $5 billion in net profits during the first half of 2024, as highlighted by Van de Poppe. The company asserts that it is fully backed and over-collateralized, although critics continue to point out its ongoing issues with transparency.
The introduction of MiCA (Markets in Crypto Assets Regulation) in Europe has brought stringent rules aimed at ensuring investor protection and financial stability for stablecoins operating within the region. While Tether has opted not to comply with MiCA, it has strategically invested in Stably, a euro-pegged stablecoin issuer that meets regulatory standards. This strategic move allows Tether to continue its operations in the U.S. and MENA regions while circumventing European regulatory challenges.
Current Market Sentiment Surrounding Tether
As European exchanges adjust to MiCA, many have proactively delisted USDT, favoring USDC or euro pairs instead. Although competitors like Circle’s USDC have gained market share, some industry experts believe that fears regarding USDT’s future are overstated. Analysts argue that while this transition might lead to temporary liquidity challenges, a market crash is unlikely. In fact, the current fear-driven climate could offer advantageous buying opportunities for altcoins at lower prices.
Paolo Ardoino, Tether’s CEO, has called on supporters to disregard misinformation, dismissing competitors’ claims as baseless. Tether has been preparing for MiCA by halting its EURT stablecoin to align with future regulations while investing in EU operations. Crypto lawyer Jonathan Galea clarified that non-compliance with MiCA does not render Tether illegal, although excessive enforcement could impact market liquidity. Significantly, Tether’s primary focus remains on Asia, where the majority of its trading occurs, thus limiting the impact of the European market.
Altcoin Market Forecast for 2025
Michael Van de Poppe’s forecasts for altcoins in 2025 suggest that the current market negativity creates a unique opportunity to accumulate altcoins at cycle lows. He points out that Bitcoin’s recent correction and outflows from its ETFs are typical behaviors associated with year-end portfolio rebalancing by asset managers, with an expectation of renewed inflows starting in January.
Ethereum, on the other hand, is maintaining its strength against Bitcoin, showing signs of upward momentum and remaining undervalued. Van de Poppe identifies Optimism and SEI as promising altcoins with the potential for early-year rebounds and emphasizes that XRP’s recent correction is merely a natural retracement.
He downplays the bearish sentiment surrounding Tether, suggesting that the market is poised for a reversal in January, providing an advantageous entry point for investors seeking long-term gains. Overall, the current landscape of the crypto markets presents both challenges and opportunities for discerning investors.
