Category: Tether

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Stablecoins Tether

USDC Supply Reaches $5 Billion as Tether Dominance Drops below 80%

A recent stats report by Coin Metrics, shows USD Coin (USDC) supply reaching US $5 Billion, rising from just 500 Million since last year.

Source: Coinmetrics.io

About USD Coin

USD Coin (known by its ticker USDC) is a stablecoin that is pegged to the U.S. dollar on a 1:1 basis. Every unit of this cryptocurrency in circulation is backed up by $1 that is held in reserve, in a mix of cash and short-term U.S. Treasury bonds. The Centre consortium, which is behind this asset, says USDC is issued by regulated financial institutions.

In 2020, Circle and Coinbase collectively announced a major upgrade to USDC’s protocol and smart contract. The goal of these enhancements is to make it easier for USD Coin to be used for everyday payments, commerce and peer-to-peer transactions.

Tether Dominance Drops below 80%

As a result on USDC growth, Tether’s share of total stablecoin supply is decreasing. Although Tether is still by far the most dominant stablecoin, it’s down to only about 75% of the total market. This is its lowest share of total supply since January 2019.

Source: Coinmetrics.io

USDC Coin Price Flatlines

Also we noticed that the USDC coin price has stabilised around the US $1 mark (which is the price it represents). This may lead to it being used instead of USDT by traders as they come in and out of BTC and other coins.

Source: Coinmarketcap.com

You can find more news about Stablecoins here.

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Bitcoin Bitcoin Mining Crypto News Crypto Trackers Cryptocurrencies Ethereum Investing Markets Stablecoins Tether Worldwide

Crypto Market Cap Hits One Trillion US Dollars

The overall cryptocurrency market capitalization has reached one trillion US dollars for the first time in history, according to data from the leading crypto statistics site Coinmarketcap.com.

Major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have seen exponential gains over the past few months, both rising by over 300% since November. Some smaller cap crypto assets and digital tokens like Chainlink (LINK), Cardano (ADA), and Polkadot (DOT) have enjoyed similar price rallies.

Bitcoin’s market valuation recently catapulted to $650 billion, overtaking major US investment firm Berkshire Hathaway, with a $533 billion market cap. Berkshire Hathaway was acquired and reformed in the 70s by iconic investor Warren Buffet, who remains its chairman and CEO to this day. Buffett has historically been very vocal about his dislike of cryptocurrencies, once famously calling Bitcoin “rat poison squared”. 

Despite Bitcoin being the best performing asset of the past decade by a large degree, Buffett continues to discount its worth, insisting that it has no value and is purely speculative. However, several major tech firms and financial institutions disagree, such as 170-year-old Mass Mutual which recently bought up $100 million worth of Bitcoin. A small amount compared to the world’s largest digital currency asset manager, Grayscale, with over $20 billion invested in crypto assets.

Image from Howmuch.net
Image from Howmuch.net

Criticism

Naturally, the extreme gains mean the cryptocurrency market has once again come under fire from critics who believe that asset prices are being manipulated. As with the previous 2017 rally, many critics believe that USDT tokens printed by stablecoin company Tether are being used to artificially prop up the cryptocurrency market – much like the US Federal Reserve props up traditional stock markets with seemingly endless USD issuance.

The concerns are not without merit, especially considering Tether’s continued reluctance to prove that it’s USDT tokens are fully backed by genuine dollar reserves. Tether has been minting millions of dollars in USDT tokens lately, presumably to meet the demand of consumers cashing out their Bitcoin profits or buying USDT as a digital onramp to the crypto world. Without clear and transparent auditing of this issuance, it’s fair to say the situation has the potential for abuse and manipulation.

One argument that challenges this theory is PlanB’s Bitcoin stock-to-flow model, which has accurately tracked the price movements of the BTC/USD trading pair over several years. The model reveals how the price of Bitcoin closely follows a set pattern dictated not by buyers or sellers but rather scarcity created by the algorithm which halves the BTC mining reward every 210,000 blocks. Price movements from the very first Bitcoin halving in late 2012 – long before Tether started printing in 2015 – correlate with Plan B’s stock-to-flow model. This suggests that the current price rally and the one following the previous 2016 halving are simply a result of Bitcoin’s coding rather than any external manipulation.

Image from PlanB (@100trillionUSD) on Twitter
Image from PlanB (@100trillionUSD) on Twitter
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Stablecoins Tether

Tether (USDt) Market Capitalization has Surpassed US$20 Billion

Tether (USDt) Market Capitalization has Surpassed US$20 Billion

The fourth-largest digital currency, Tether (USDt) reached a milestone record of US$20 billion on Friday. The record further strengthens the digital currency’s position as the largest United States dollar-backed stablecoin to a great extent. With lots of USDt minted on several blockchain networks, including Ethereum, Tron, etc., it’s worth mentioning that gained massive adoption for trades this year. 

Not if the second-largest stablecoin USD Coin (USDC) is closing in with its US$3.2 billion market valuation.

USDts are now a US$20 Billion Asset Combined

In celebration of the historic increase in USDt market capitalization, Tether, the company behind the stablecoin, tweeted the development, saying “this fantastic milestone is another confirmation for Tether maintaining its number one spot as the most liquid, stable and trusted currency.” Noteworthily, a huge number of USDt has been issued this year alone, which signals a strong demand for the stablecoin for settling transactions, and mostly for trading. 

At the time of writing, the maximum supply of the stablecoin is 20,533,323,926 USDt, of which 20,038,839,262 USDt is currently in circulation, according to the information provided by Coinmarketcap. One factor that indicates the strong demand for the stablecoin in trading is the fact that it has a very high 24 hours trading volume. 

Per Coinmarketcap, the US dollar stablecoin sees US$80 billion 24hrs trading volume, which is way bigger than other popularly-traded cryptos, including Bitcoin (US$48 billion), Ether ($19 billion), Ripple ($16 billion), etc.

USDt on Ethereum and Tron Blockchain

Ethereum and Tron are the two biggest blockchain networks, respectively hosting the stablecoins. According to Etherscan, the Ethereum blockchain explorer, there are currently 12.6 billion USDt issued on the blockchain. The rival blockchain network, Tron, holds 6.4 billion of the stablecoin, all of which are currently in circulation, per Tronscan.

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Bitcoin Crypto News Market Analysis Tether

Bitcoin Daily Issuance Reaching New Lows As Supply Drys Up

Bitcoin issuance is decreased by 50% every four years. These halvings are also a core part of the Bitcoin protocol, and are predictable well into the future.

Source: Coin Metrics Network Data Charts

New bitcoins are issued every time a new block is mined as a reward for the miner who successfully mined the block. This is the only way that new bitcoins can be created and is a key part of the Bitcoin protocol. 

Bitcoin’s current block reward is 6.25, which means 6.25 new bitcoins are issued every time a block is mined. On average, blocks are mined every ten minutes, which typically means about 800-1000 new bitcoins are issued every day. There’s slight variance from day to day due to the unpredictable nature of exactly how often new blocks are mined (Bitcoin’s difficulty adjusts every two weeks to keep the average block time around ten minutes), but over the long term this supply issuance is deterministic and predictable. 

Tether (USDT) Supply Soars

Source: Coin Metrics Network Data Charts

Tether’s total supply has passed 20 billion. After initially launching on Omni, the Ethereum based version of Tether (USDT_ETH) and Tron based version of Tether (USDT_TRX) have both grown rapidly over the last year (see our report “The Rise of Stablecoins” for an exploration of why stablecoins have been exploding). Tether is still the undisputed leader of stablecoins, with over 5x the supply of any other stablecoin. But regulatory action is once again heating up with the recent introduction of the STABLE Act. Tether may once again come under fire in 2021.

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Crypto News Regulation Stablecoins Tether

Is the New STABLE Act Really a Threat to Crypto?

US Congress

On December 2, 2020, three members of the US House of Representatives, Michigan Democrat Rashida Tlaib along with Congressmen Jesus García and Stephen Lynch, introduced a new stablecoin regulation bill dubbed the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act. 

The rather conveniently titled STABLE act proposes some strict restrictions on the issuance of digital versions of the US dollar. Essentially, it requires that any US-based company like Facebook that wishes to issue a stablecoin backed by the US dollar must become a bank. Should the act be passed into law, private US-backed stablecoin operators like Tether (USDT), USD Coin (USDC), and Paxos Standard (PAX) will be required by law to obtain not only a banking charter but also approval from the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and financial regulators.

Now, all this makes some sense – the US can’t have every Tom, Dick, and Harry handing out digital tokens like sweets and claiming they’re backed by “safe and reliable” dollar bills. Tether has been doing this for quite a while now and has racked up a rather sizable amount of supposedly government-backed USDT tokens to the tune of almost $20 billion. Even though that number is equivalent to only 0.08%  0.07%  0.06% of the total US national debt, it’s still a fairly large sum. 

US Congress is understandably concerned that should such a large company default on its liabilities, there would be more than a few extremely unhappy customers. So, to avoid a crypto version of the 2008 financial crisis, regulations like the STABLE Act are allegedly here to ensure that the ever trustworthy Federal Reserve keeps a close eye on your money. 

So how is this a threat to crypto?

The proposal of the act has sent ripples through the crypto community, some of whom fear the stifling regulations could limit market activity or even turn node operators into criminals. Others feel it would hinder the development of blockchain and cryptocurrency technology just at a time when it’s getting started. Jeremy Allaire, CEO of Circle, the company that issues USDC, had this to say:

“The STABLE Act would represent a huge step backwards for digital currency innovation in the United States, limiting the accelerating progress of both the blockchain and fintech industry.”

While their concerns are valid and the regulations could be disruptive, some form of insurance for crypto consumers does seem pertinent. Regulations in the form of STABLE may be overbearing but there are areas of the crypto sector that could do with better oversight. One can’t help but question why Tether remains resistant to an audit that would confirm the dollar-backed status of its reserves. It doesn’t help that its parent company, iFinex Inc, is embroiled in an ongoing lawsuit with the New York Justice Department regarding the cover-up of $850 million in lost co-mingled client funds.

Amy Castor suggests Bitcoin’s rise is akin to magic. Source: amycastor.com

If you believe, as some do, that USDT tokens are not fully backed by anything tangible, then the implications of the STABLE act could be far-reaching. If for whatever reason, Tether was unable to keep operating and was not able to honour all the USDT tokens in circulation, the crypto market would certainly take a knock. With Tether headquartered in Hong Kong, it’s uncertain how the regulations may affect the company.

At the end of the day, whether the STABLE Act truly poses a threat or not, it further highlights a pressing need for greater decentralization in the crypto community. Ideally, an ecosystem that doesn’t rely on favourable government regulations and outdated fiat on-ramps but rather an evenly distributed, community-led system secured by code.

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Bitcoin Sponsored Article Tether

3 Benefits of Tether

Tether is one of the most successful cryptocurrencies in the world. It’s currently the fourth largest crypto in terms of market capitalisation, and the top-rated stablecoin currently in circulation. Its market cap is more than $10,000,000,000, with a 24-hour trading volume of almost $29,307,000,000 at the time of writing. In fact, this trading volume makes it the most widely traded cryptocurrency of all – beating even Bitcoin to the top spot!

Whether you’re considering investing in Tether or simply want to know more about this stablecoin, read on. In this article, we’ll be guiding you through the threemain benefits of Tether from a trader’s point of view.

1. Tether is a stablecoin

What is a stablecoin?

Have you come across the term ‘stablecoin’ online but aren’t sure what it means? A stablecoin is an alternative form of cryptocurrency which was developed to bring traders the benefits of crypto with the security of fiat currency. (Fiat currency is a type of currency that maintains its value in the form of money, generally by government regulation. An example of this would simply be the Aussie dollar, US dollar, British pound, or Japanese yen).

More ‘traditional’ forms of cryptocurrency are infamously volatile. You’ve probably seen reports of Bitcoin’srecord volatility levels, which hit a staggering 8% in 2017. It’s this volatility which often puts people off from investing in digital assets – even experienced traders who follow the markets carefully.

Stablecoins are an innovative solution to this problem. Instead of deriving their market value from the number of traders, exchanges, and coins in circulation, stablecoins are tied to a fiat currency. This means that their value is designed never to fluctuate from a fixed amount – for example, 1 AUD or the price of a stable commodity.

What is the value of Tether?

Tether (USDT) takes its value from the US dollar. According to the company which owns the stablecoin, Tether Holdings Ltd, 1 USDT will always be equal to $1, with an additional $1 held in reserve. This means it’s nowhere near as volatile as Bitcoin and other cryptos, making it a far safer investment.

Tether can be easily exchanged

As a stablecoin, another benefit of Tether is the fact that it can be easily exchanged. Although this hasn’t always been the case, it’s currently possible for Tether investors to exchange each Tether token in their wallets for $1, making it simple to convert their digital assets into ‘real’ money.

Tether is ‘the digital dollar’

For this reason, Tether is often known as ‘the digital dollar’ and a ‘digital-to-fiat currency’. Because its value is relatively consistent in comparison to cryptos such as Bitcoin, Litecoin, or Ethereum, many traders treat it straightforwardly as an alternative form of fiat currency. This makes it a convenient intermediary stage between other cryptocurrencies and hard cash. Simply exchange your Bitcoin reserves for Tether, then convert it into dollars.

There is no fixed number of Tether tokens

For many people, one of the most confusing aspects of Bitcoin is the fact that the total number of Bitcoin tokens is fixed. There can only ever be 21 million tokens in circulation. This might sound like a lot, but reserves seem a lot thinner when you consider that there are already roughly 18,500,000 in circulation, just over 10 years after the launch of Bitcoin in 2009 – and that this number is predicted to change every 10 minutes.

Bitcoin halving

To help regulate the circulation of Bitcoin, a process known as ‘Bitcoin halving’ occurs every four years. This is when the price of Bitcoin is cut in half, happening most recently in May 2020. Before this point, miners earned 12.5 Bitcoin (BTC) per ‘block’. They now earn 6.25 BTC.

Because the value of Tether is fixed, the number of Tether tokens in circulation makes no difference to its worth. This arguably makes it a more secure long-term investment than Bitcoin, which has an inevitable expiration date.