Widely followed cryptocurrency analyst Willy Woo predicted Monday that stablecoin issuing company Tether USDT/USD would become the top holder of U.S. treasuries once Bitcoin BTC/USD hits $1 million a piece.

What Happened: Woo reacted to an X post showcasing Tether's growing demand for U.S. Treasuries, which was surging ahead of many sovereign nations.

“The crazy thing is when BTC hits $1 million, Tether will likely be the #1 holder of U.S. treasuries,” Woo projected.

Dollar-pegged coins like USDT act as a bridge between the volatile cryptocurrency market and the traditional financial world. A rising Bitcoin price can signal increased interest in the broader cryptocurrency market, leading to a surge in demand for stablecoins.

Tether backs its $151 billion stablecoin by holding reserves of cash and cash equivalents, more than 80% of which is made up of U.S. treasuries.

Tether’s exposure to U.S. treasuries approached $120 billion, the firm said in its first quarter attestation report released earlier this month. This makes the firm a bigger holder of U.S. sovereign debt than Germany and the United Arab Emirates, according to data from the Treasury Department. Last year, Tether ranked as the seventh-largest buyer of U.S. Treasury bills.

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While the company regularly publishes attestations of its reserves, critics have argued that only a full audit by a major global firm can verify the quality and stability of its backing.

See Also: Arthur Hayes Forecasts Bitcoin Will Hit $200,000 In Next Bull Run, Anticipates Revival Of Fortunes For This ‘Hated’ Coin

Why It Matters: Woo’s prediction comes in the wake of the advancement of the GENIUS Act, also known as the stablecoin bill, in the Senate. This legislation could potentially impact the role of stablecoins like Tether in the financial ecosystem.

Senator Bill Hagerty (R-Tenn.), the bill sponsor, stated that the legislation would ensure the U.S. dollar’s dominance and trigger demand for U.S. treasuries in the future.

Photo: DIAMOND VISUALS/Shutterstock

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.