Cryptocurrency has always been a controversial topic. There are numerous factors why crypto has not yet become mainstream, from the volatility of Bitcoin to the ungovernability of blockchain technology. However, could that change if one of the most controversial cryptocurrencies of all is currently growing at a record rate?
As we move into the second half of 2020, we’re seeing widespread reports of Tether’s growth. First launched in 2014, Tether is a stable coin. This means that it is backed by fiat currency (fiat currency is in the form of money, the value of which is usually maintained by a government). In Tether’s case, this fiat currency is the US dollar – hence Tether’s currency code USDT.
This article explains how much Tether has grown so far in 2020. Whether you are a tethering expert or a newbie in need of a complete solution Tether (USDT) 101 Instructions, read on.
What is the current growth rate of Tether USDT?
At the beginning of 2020, Tether was valued at $ 4.1 billion – however, by early July, its market cap had reached $ 10 billion. That’s an astonishing growth rate of almost 144% in just six months that is generally unknown in stable coins.
Later in July, it was revealed that the Treasury of Tether Holdings Limited had minted a staggering 80 million new USDT tokens and transferred them to anonymous Tether wallets in less than 24 hours.
How does this compare to other cryptocurrencies?
The world’s fastest growing cryptocurrency is Compound (COMP), a specialized Ethereum token that grew 143% in 24 hours in June 2020. It might have done what Tether did in six months in one day, but comparing this directly is not necessarily helpful.
Since Tether is a stable coin, sudden growth (or sudden decline) is less expected than when analyzing other cryptocurrencies. As the name “stablecoin” suggests, these currencies have been pegged to the fiat currency to make them more stable and less prone to volatility. Compare Tether’s growth rate over the past six months to the fact that Bitcoin’s price recently down 8% in less than five minutes.
In terms of market capitalization, this growth spurt makes Tether the third largest cryptocurrency in the world after Ethereum and Bitcoin. At the time of writing, Tether’s market cap is $ 9,170,182,318 while Ethereum’s is $ 26,768,362,382. Bitcoin is well ahead at $ 170,049,586,248. Interestingly, Tether’s 24-hour transaction volume is the highest of all at nearly $ 21 billion. (Ethereum costs just under $ 6,400,000,000 while Bitcoin trades around $ 16,300,000,000).
What does the rest of 2020 hold for Tether USDT?
Thanks to the rapid growth and re-minted tokens, Bloomberg reporters have forecast that Tether could put Ethereum in second place behind Bitcoin by the end of the year.
In recent years, Tether Holdings Limited has also discussed the introduction of two new versions of the stable coin currency – one in Europe (supported by the euro) and one in Japan (supported by the Japanese yen). While there is currently no set release date, the growth of Tether USDT could potentially lead to these new iterations.
What is the Tether USDT Controversy?
Despite the sudden growth, the controversy surrounding Tether has not yet subsided. The New York Supreme Court is currently opening an investigation into the activities of Bitfinex, the cryptocurrency exchange platform owned by the same team as Tether. (Both Bitfinex and Tether refused to connect for years, until November 2017 when the so-called “Paradise Papers” became known, confirming that the two companies are sister companies.)
The investigation aims to prove whether Bitfinex used Tether tokens to manipulate the trading price of Bitcoin. Banks and financial institutions such as Wells Fargo have previously denied their services to Bitfinex and Tether on suspicion that a huge increase in the number of Tether tokens historically coincided with dramatic changes in the price of Bitcoin.
The last word
There is no doubt that Tether’s unprecedented growth is impressive. The fact that Tether has maintained such a strong market position despite its controversial past is testament to its popularity – and with millions of users continuing to trade Tether every day, that growth doesn’t seem to be slowing yet.