Tether’s Market Cap Grows at Near Record Pace November 28, 2020 November 28, 2020 Kelly Cromley http://1AZFjzw2#Nwf63pYaMWq#xIY
Market NewsNovember 28, 2020 by Kelly Cromley

Tether’s Market Cap Grows at Near Record Pace

In the past few weeks, the market capitalization of Tether (USDT), the US dollar-pegged stablecoin, has risen sharply and assisted in fueling the latest Bitcoin (BTC) rally that led prices to fresh historical highs.

Paolo Ardoino, who functions as CTO to both Bitfinex and Tether, tweeted earlier this week that the USDT supply rose by 1 billion in a span of nine days, highlighting the second-quickest expansion in the stablecoin’s history.

The record was established on September 4, 2020 when USDT’s floating supply rose by 1 billion in merely eight days.

At the time of writing this article, the market cap of Tether was $18.959 billion, implying that there is an equivalent number (19 billion) of USDT in circulation trading at a price of almost $1.00.

Since the beginning of this year, the market cap of Tether has increased by roughly four times, as per CoinMarketCap data. Given the prevailing circulation, Tether has the fourth largest market cap in the crypto sector.

Stablecoins such as USDT provide fiat onramps to crypto markets and ensures reduction of price volatility, while guaranteeing easy redemption following liquidation of digital assets. Even though USDT is said to have been pegged to greenback on 1:1 ratio, Tether has never conducted a detailed audit of its bank accounts.

Last year, a report published by Bloomberg stated that Tether’s USDT was not totally pegged to the US dollar, but rather the floating supply is only backed 74% through a combination of cash and short-term securities.

Tether is also managed by the executives who administer Bitfinex, one of the renowned cryptocurrency exchanges across the globe. There is an allegation that Tether and Bitfinex rigged the 2017 bull market, although providing evidence for such a blame is not easy due to the intertwined nature of decentralized crypto markets.

Legal experts have opined that price rigging in a unique asset such as Bitcoin will be very difficult to substantiate. In the meanwhile, Tether stays as the top stablecoin in the crypto sector, commanding over 75% of the stablecoin market cap.

AuthorKelly Cromley

Kelly is our in house crytpto researcher, delving into the stories which matter from blockchains being used in the real world to new ico coming out.