Tether’s market cap nears $80 billion milestone
Today, the market capitalization of Tether’s USDT stablecoin surpassed $78.5 billion, further helping it cement its position as the world’s largest stablecoin.
Tether, which is closely affiliated with crypto exchange Bitfinex, works across a diversity of different blockchains, including Algorand, Bitcoin Cash’s SLP, Ethereum, EOS, Liquid Network, Omni and Tron.
Tether, which is ranked the 4th biggest cryptocurrency by market cap, has been rising rapidly throughout 2021 amid growing institutional and corporate demand. Year-to-date, the token added nearly $60 billion, which is greater than the combined market capitalization of all rival stablecoins.
For comparison, the market cap of this dollar-pegged coin stood at $20 billion as of January 1. Then, it soared to $60 billion in May. The next jump, to over $70 billion, took place at the beginning of November. Tether has seen roughly half of its aggregate market cap achieved in the last six months.
At the current circulating supply, Tether represents 3.35% of the $2.33 trillion cryptocurrency market capitalization and 46% of the $168.3 billion stablecoin economy, according to CoinMarketCap.
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Demand for USDT in the e-commerce and payment space has been surging as the token allows users to avoid volatility. Moreover, online retailers and payment gateways benefited from faster, cheaper transactions as compared to credit cards and traditional payment systems.
This fantastic milestone was driven by growing interest in decentralised finance (DeFi) and OTC desks that use the token to settle block trades over-the-counter.
Additionally, Q4 rally was supported by the news that US regulators settled a nearly two-year investigation into the finances and corporate practices of Tether and Bitfinex.
The stablecoin issuer and its associated crypto exchange agreed to pay a $42 million fine to resolve a closely-watched legal dispute about Tether’s fiat reserves.
The derivatives regulator said the USDT stablecoin was not fully backed at all times by fiat currencies as its issuer had been advertising since its launch in 2014. In fact, Tether conflated its cash holdings with unsecured debts and non-fiat assets. The reported reserves also included funds held by third-parties, as well as the loan it had given to Bitfinex when the exchange needed help responding to a “liquidity crisis.”
US authorities have investigated the firms over allegations that they moved Tether’s commingled client and corporate funds to cover up Bitfinex’s apparent loss of $850 million.
