Tether, the digital currency pegged to the U.S. dollar and known as USDT, hit new all-time high volumes with total assets surpassing $60 billion Tether ...
When it comes to stablecoins, one cryptocurrency has risen above the rest, establishing itself as the undisputed leader, especially in terms of market cap. Tether, the digital currency pegged to the U.S. dollar and known as USDT, hit new all-time high volumes that pushed it even further ahead of its peers.
Tether USDT has secured its dominance in the market with remarkable success. In fact, the cryptocurrency has witnessed an astonishing surge in demand, with Tether’s total assets surpassing $60 billion for the first time since March 2021. This is 12 times more than the USDC market cap.
With that, the meteoric rise of Tether has caught the attention of investors and financial experts, who are keenly watching the performance of this cryptocurrency with great expectations.
Growing Demand for Stablecoins
Tether USDT exceptional success can be attributed to the growing demand for stablecoins, which have become increasingly popular in recent years.
Stablecoins generally intend to achieve minimal or no volatility by pegging their value to price-stable assets such as gold or the U.S. dollar.
Unlike other cryptocurrencies that are highly volatile and affected by market fluctuations, Tether provides a stable value that remains consistent even during turbulent market conditions.
Outperforming Other Stablecoin Alternative
Three prominent options have been outperforming other stablecoins in the cryptocurrency space. There are features and advantages of USD Coin (USDC), Binance USD (BUSD), and Dai (DAI), as they have grown over the years, as has Tether.
Firstly, USD Coin (USDC) stands out with its commitment to maintaining stability and transparency. This stablecoin maintains a 1:1 ratio with the US dollar, providing a reliable medium of exchange. Notably, USDC is backed by the CENTRE Consortium, which ensures full collateralization. As a result, USDC boasts a market capitalization of $5,5 billion, positioning it as the 14th largest cryptocurrency, at the time of publishing.
Moving on, Binance USD (BUSD) was having traction before the NYDFS ordered its new owners, Paxos, to cease issuing BUSD. On February 13, 2023, the United States Securities & Exchange Commission (SEC) issued a Wells Notice to the Paxos Trust Company, saying it is an unregistered security.
On the other hand, Dai (DAI) offers a distinctive approach to stability. Unlike other stablecoins, Dai achieves its stability through a decentralized collateralization mechanism. By locking up Ethereum or approved cryptocurrencies in smart contracts, users can generate Dai tokens. With a fixed value of 1 US dollar, DAI’s market capitalization amounts to $4,8 billion, placing it as the 16th largest cryptocurrency.
Attractive and Safe Option for Traders
Tether tokens have emerged as a pivotal component of the digital ecosystem, offering significant advantages for everyone. As promised, this makes it an attractive option for traders, institutions, and investors who want to hedge against market risk. However, concerns over crypto regulations have always been there. In the United States, the Securities and Exchange Commission (SEC) argues that while not all cryptocurrencies are considered securities, some fall under its purview.
If a cryptocurrency is offered as an investment by a company aiming to develop a product that gives it value, it may be deemed a security. In such cases, developers must register with the SEC, which involves significant costs and paperwork, outlining how the token will gain value.
In fact, this regulation has been enforced by authorities. For example, The New York Department of Financial Services (NYDFS) has instructed blockchain company Paxos Trust to halt the issuance of Binance USD (BUSD). This action follows the United States Securities and Exchange Commission (SEC) issuing a Wells notice to Paxos, alleging that Binance USD is an unregistered security.
While Paxos will continue managing redemptions of BUSD, the NYDFS has ordered them to stop creating more of the token. The department is closely monitoring Paxos to ensure orderly redemptions with enhanced compliance protocols. Paxos has notified customers of its intention to terminate its relationship with Binance for BUSD.
As Tether continues to power ahead of its stablecoin peers, it is generating record-high revenues, with the cryptocurrency now widely viewed as a powerful force that is reshaping the landscape of the digital currency market.
However, the landscape of stablecoins is not limited to Tether alone. Other stablecoin alternatives like USD Coin (USDC) and Dai (DAI) have also shown impressive growth and gained popularity within the cryptocurrency space. Additionally, regulatory considerations and actions by authorities, such as the SEC and NYDFS, highlight the importance of complying with securities regulations in the evolving cryptocurrency market.
As traders and institutions seek attractive and safe options, stablecoins like Tether offer stability and liquidity, providing a valuable tool for hedging against market risks.