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The crypto markets closed 2024 on a shaky note, with fears surrounding Tether (USDT) dominating social media. Many speculate that Tether’s compliance with Europe’s MiCA regulations could trigger a market crash. However, the narrative may be overblown according to Michael Van de Poppe.
Revisiting Tether’s History and Profitability
Tether, often a target of skepticism, has faced allegations of being a “bubble” or engaging in opaque practices. Despite the criticism, Van de Poppe noted that Tether reported over $5 billion in net profits in the first half of 2024, highlighting its robust financial health. The company claims to be fully backed and over-collateralized, but critics point to its lack of transparency as a persistent issue.
MiCA (Markets in Crypto Assets Regulation) introduces strict rules for stablecoins operating in Europe, emphasizing investor protection and financial stability. While Tether has chosen not to comply with MiCA, it has invested in the euro-pegged stablecoin issuer Stably, which meets regulatory requirements. This move allows Tether to maintain its presence in the U.S. and MENA regions while avoiding European regulatory hurdles.
Market Sentiment Around Tether
As exchanges in Europe adapt to MiCA, many have proactively delisted USDT in favor of USDC or euro pairs. While competitors like Circle’s USDC have gained market share, some experts argue that fears about USDT’s future are exaggerated. Analysts suggest that while this transition may cause temporary liquidity issues, a market crash is unlikely. Instead, the fear-driven selling could present buying opportunities for altcoins at discounted prices.
Tether’s CEO, Paolo Ardoino, urged supporters to ignore misinformation, labeling competitors’ claims as baseless. Tether has been preparing for MiCA, even halting its EURT stablecoin to comply with future regulations while investing in other EU operations.
Crypto lawyer Jonathan Galea clarified that not meeting MiCA compliance doesn’t make Tether illegal, but the rules could limit market liquidity if enforced too strictly. Importantly, Tether’s focus on Asia, where most of its trading occurs, means the European market’s impact is limited.
Altcoin Predictions 2025
Van de Poppe’s on altcoin predictions for 2025 suggests that the current market negativity presents a unique opportunity to accumulate altcoins at cycle lows. He notes that Bitcoin’s correction and outflows from its ETFs are typical year-end portfolio rebalancing by asset managers, with inflows expected in January.
Ethereum, however, is holding strong against Bitcoin, showing signs of upward momentum, and yet it remains undervalued. Van de Poppe highlights Optimism and SEI as promising altcoins, with potential rebounds early in the year, and emphasizes that XRP’s correction is a natural retracement.
He dismisses the bearish sentiment around Tether as overblown, suggesting the market is primed for a reversal in January, offering a favorable entry point for long-term gains.