The market cap of Tether (USDT), a US dollar-pegged stablecoin, has surged in recent weeks, potentially helping fuel the recent Bitcoin rally that brought prices closer to all-time highs.
Paolo Ardoino, who serves Bitfinex and Tether as a dual CTO, said on Twitter on Thursday that USDT supply rose by 1 billion in nine days, marking the second fastest advance in its history. The record is that on September 4, 2020, the circulating supply of USDT increased by 1 billion in eight days.
Tether has a market value of about $ 19 billion as of press time, which means that there is about $ 19 billion USDT in circulation at a price of $ 1.00.
According to Coinmarketcap data, Tether’s market cap has increased nearly fourfold since the start of 2020.
In the current circulating supply, Tether has the fourth-highest market cap of any cryptocurrency.
USDT and other stablecoins offer fiat on-ramps to cryptocurrency markets, thereby minimizing price volatility and enabling easy use after digital assets are sold. Although USDT is allegedly backed by real US dollar reserves, Tether has never produced a complete audit of their bank accounts.
A Bloomberg report claimed that in 2019 Tether’s USDT was not fully tied to the Dollar, but instead that the circulating supply was only 74% backed by cash and short-term securities.
Also, Tether is led by the same management group that oversees Bitfinex, one of the world’s largest cryptocurrency exchanges. Tether and Bitinex allegedly manipulated the 2017 bull market, but such a claim seems difficult to prove due to the complex nature of decentralized cryptocurrency markets.
Meanwhile, Tether remains the dominant stablecoin in the industry accounting for more than three quarters of the stablecoin market value.