There are two things we can say for sure about Tether (USDT).
First, it’s the most popular Stablecoin In the cryptocurrency market, it is by far the eighth largest cryptocurrency by market capitalization and with the second highest daily trading volume of all cryptocurrencies after Bitcoin.
Second, it’s one of the most controversial cryptocurrencies that ever existed.
In fact, many people in the crypto community have used the term “The great tether controversy. This refers to the fact that many have become suspicious that while Tether claims to support every single USDT coin with USD 1, it actually only holds a small fraction of the dollars they supposedly hold.
The reason many people suspect Tether of lying about their USD holdings is because Tether has never consented to a transparent review of their bank reserves.
In September 2017 you submitted a document entitled “Proof of funds, ”But the document is far from transparent – the names of the banks have been obscured and it was barely a full audit.
To add to the controversy, the company that conducted this audit, Friedman LLP, broke up their relationship with Tether just a few months later.
Despite these numerous suspicions, no one has proven in one way or another whether Tether made tons of uncovered USDT coins or whether this whole controversy is just FUD (Fear, Uncertainty, and Doubt).
To see what the larger crypto community believes, we’ve done some research to dig deeper and see what investors think.
“Is Tether fully supported by the USD?”: Poll Results
We asked the Invest in Blockchain community on Twitter and Telegram to answer a simple question: Do you think every USDT is covered by $ 1?
On twitterA total of 875 people voted. 42% said they believe that every USDT is backed by USD 1, while 58% believe that Tether did not back every single USDT.
Source: Invest in Blockchain Twitter
In our Invest in the blockchain telegram channelThe results were a little different. A total of 52 people voted, and a 73% majority said they don’t believe that every USDT is 100% covered by $ 1.
Source: Invest in Blockchain Telegram
When we combine these surveys together, we find that the end results are:
Tether’s future looks uncertain
All of this controversy surrounding Tether is easy to spot on their recent charts.
USDT’s market cap for coins has steadily declined since the beginning of the month, from $ 2.8 billion to $ 1.9 billion at the time of writing.
The stable coin has not been as stable lately either. USDT sold below its assumed value of $ 1.00 for most of the month, down to $ 0.94 on October 15, 2018.
Tether’s popularity has declined as a direct result of people’s distrust of the project’s opaque practices.
In addition, many New stable coins have come onto the market lately leading to increased competition in the stablecoin scene.
These competitors include two stablecoins – the Paxos Standard (PAX) and the Gemini Dollar (GUSD) – that have been approved and regulated by the New York State Department of Financial Services. This makes them the first regulated cryptocurrencies to hit the market.
A competitor to Tether is Circle’s USD Coin (USDC). County CEO Jeremy Allaire has specified He believes the crypto market will turn away from the controversial tether in the near future and quickly support more transparent stablecoins:
Market infrastructure such as stablecoins are becoming the base layer that supports every financial application. It must be legitimate, trustworthy, and based on open standards. We solve many of these fundamental problems. This is a huge difference from something like tether, and we believe the market will focus on that very quickly.
Tether is sure to still get the award for by far the most popular and widely used stablecoin.
But with all of these new transparent – and some even regulated – competitors, if they don’t soon prove to the public that they are trustworthy, it could mean trouble for Tether’s future.