Tether market capitalisation at record pace

Tether market capitalisation at record pace

Tether market capitalisation (almost) at record pace

In just nine days, Stablecoin USDT has grown by another billion US dollars.

The market capitalisation of Stablecoin’s Tether (USDT), which is linked to the US dollar, has been soaring in recent weeks, although it may also have been a driving force for Bitcoin’s record-breaking climbing division (BTC).

Paolo Ardoino, who is CTO of both Tether and the related crypto exchange Bitfinex, confirmed on Twitter on Thursday that the USDT’s volume in circulation has increased by a further $1 billion in just nine days. This is the second fastest Bitcoin Profit billion dollar increase in the history of Stablecoin. The previous record was set on 4 September 2020, when it took Tether only eight days to grow $1 billion.

At the time of going to press, Tether’s market capitalisation is just under $19 billion, which also means that the volume of Stablecoin in circulation is also about $19 billion, as each unit is said to have an approximate value of $1.00.

The market capitalisation of Tether has almost quadrupled since the beginning of 2020, as the CoinMarketCap data show.

With the current amount in circulation, Tether has the fourth largest market capitalisation of all crypto projects.
Tether market capitalisation. Source: CoinMarketCap

As a reminder: Stablecoins are crypto-currencies that obtain their name-giving (value) stability by being linked to an external asset, such as tether, which is linked to the US dollar, for example.

The USDT and other Stablecoins are therefore particularly suitable as „access ramps“ for crypto investors, in that they first buy Stablecoins with their local currencies and then later buy crypto currencies via these. Due to their value stability, Stablecoins are also perfect for intermediate parking of crypto-money before it is reinvested or written off.

However, there are doubts that the USDT of Tether is really fully hedged in US dollars, as the company behind Stablecoin has never fully disclosed its own books.

These doubts were heightened last year when the influential financial portal Bloomberg reported that only 74% of the USDT in circulation at the time was backed by cash reserves and short-term securities. In the light of these findings, criticism of the Stablecoin provider’s expansive „monetary policy“ is growing louder.

This affiliation has also been criticised in the past

In addition, Tether is operated by the same management as the crypto exchange Bitfinex, which in turn is one of the world’s leading crypto trading platforms. This affiliation has also been criticised in the past, with Tether and Bitfinex being accused of jointly manipulating the market during the great crypto hype of 2017. However, this has never been proven to be true.

Earlier this year, a legal expert confirmed to Cointelegraph that it is difficult to really quantify the extent of market manipulation for a young asset class such as crypto-currencies.

Nevertheless, Tether remains the market leading Stablecoin, accounting for more than three quarters of the market capitalisation of all Stablecoins.