Plasma reaches $2.5b market cap as markets speculate on Tether connection

Stablecoin blockchain Plasma token quickly rose to $2.5 billion in market cap after the Tether partnership.

Stablecoin infrastructure is capturing significant attention among traders. On Friday, September 26, Plasma’s XPL token reached $2.5 billion in market cap, just a day after launch, breaking into the top 50 largest coins. Currently trading at $1.19, the stablecoin-focused XPL is benefiting from the hype around stablecoins and its association with Tether.

Plasma positions itself as a “money chain,” enabling sub-second finality and low costs for stablecoin transfers, a growing use case in crypto. At the same time, the project has already attracted billions in stablecoin liquidity through partnerships with projects like Aave, Ethena, Fluid, and Euler. What is more, the network reached $3.89 billion in stablecoin market cap just one day afterlaunch.

Still, the low fees are also a source of risk for the token, especially given its high valuation. Notably, on its first day of trading, total network fees were just $4,200, making a $2 billion valuation hard to justify on economics alone.

Markets speculate about Plasma’s links to Tether

A likely factor in XPL’s quick growth is speculation about its potential links to Tether, the world’s largest stablecoin issuer. For this reason, Tether, which did not launch its own stablecoin-focused blockchain, may come to rely on Plasma for cheap and fast stablecoin transfers.

For one, Tether entered a partnership with Plasma, providing it with $2 billion in USD₮ liquidity. Tether also integrated its omnichain stablecoin XAU₮ with Plasma, making it available for trading at launch time.

What is more, Tether’s owner, Bitfinex, was a major backer for Plasma, contributing $24 million. Both of these factors suggest that Plasma is aligned with Tether’s interest.