Tether’s market capitalization (USDT), a stable coin tied to the US dollar, has skyrocketed in the last few weeks, Something could have helped kickstart the recent rally in Bitcoin (BTC), which brought the price to near its all-time high.
Paolo Ardoino, who works as CTO at Bitfinex and Tether, tweeted last Thursday that the supply of USDT increased by USD 1 billion in nine days, This is the second fastest expansion in its history. The record was set on September 4, 2020 when the circulating supply of USDT rose by $ 1 billion in eight days.
At the time of this writing Tether had a market capitalization of nearly $ 19 billion. This means there are around 19 billion pieces in circulation at a price of $ 1.
Tether’s market capitalization has increased almost four times since the beginning of 2020, according to data from CoinMarketCap.
With the offer in circulation, Tether has the fourth largest market capitalization in the entire cryptocurrency market.
USDT and other so-called stablecoins provide access to fiat currencies in the cryptocurrency markets, minimize price volatility and ensure easy redemption after the sale of digital assets. Though USDT is reportedly backed by actual US dollar reserves, Tether never did a full audit of its bank accounts.
In 2019, a Bloomberg report claimed that Tether’s USDT was not fully pegged to the dollar. Rather, only 74% of the circulating supply is covered by cash and short-term securities.
Tether is also operated by the same management group that oversees Bitfinex, one of the largest cryptocurrency exchanges in the world. It has been claimed that Tether and Bitinex rigged the bull market in 2017. although Such a claim is difficult to prove due to the complexity of decentralized cryptocurrency markets.
Legal experts informed Cointelegraph about this earlier this year The extent of market manipulation on an asset as novel as Bitcoin will be difficult to prove.
Meanwhile, Tether remains the dominant stablecoin in the industry, accounting for more than three-quarters of stablecoin’s market cap.