Tether’s (USDT) Price And Total Market Cap
The chart above shows the real time price of Tether (USDT). Located in the lower left corner of the chart is the transparent trading volume of Tether in the last 24 hours. In the lower right corner of the chart, it shows the current total market cap of Tether.
What’s Tether (USDT)?
USDT is actually a stablecoin (stable value cryptocurrency) that mirrors the cost of the U.S. dollar, issued by a Hong Kong based company Tether. The token’s peg to the USD is actually claimed to be achieved via maintaining a sum of dollars in reserves which is actually equal to the number of USDT in circulation.
Originally launched in July 2014 as Realcoin, a second layer cryptocurrency token built on top of Bitcoin’s blockchain through the use of the Omni platform, it was later renamed to USTether, and then, finally, to USDT. In addition to Bitcoin’s blockchain, USDT was later updated to work on the Ethereum, EOS, Tron, Algorand, and OMG blockchains.
The stated purpose of USDT is actually to combine the unrestricted nature of cryptocurrencies – which may be sent between users without a trusted third party intermediary – with the stable value of the US dollar.
Who’re The Founders Of Tether?
USDT – or perhaps as it was recognized at the time, Realcoin – was launched in 2014 by Brock Pierce, Reeve Collins and Craig Sellars.
Brock Pierce is actually a well known entrepreneur who’s co founded a number of high profile projects in the crypto and entertainment industries. In 2013, he co founded a venture capital firm Blockchain Capital, which by 2017 had raised more than eighty million dollars in funding. In 2014, Pierce became the director of the Bitcoin Foundation, a nonprofit established to help improve and promote Bitcoin. Pierce has also co founded Block.one, the company behind EOS, one of probably the largest cryptocurrencies on the market.
Reeve Collins was the CEO of Tether for the first 2 years of its existence. Before that, he’d co founded several successful companies, like the online ad network Traffic Marketplace, entertainment studio RedLever and gambling site Pala Interactive. As of 2020, Collins is actually heading SmarMedia Technologies, a marketing and advertising tech company.
Different than working on Tether, Craig Sellars has been a part of the Omni Foundation for more than 6 years. Its Omni Protocol allows users to create and trade smart contract based properties and currencies on top of Bitcoin’s blockchain. Sellars has also worked in a number of other cryptocurrency companies and organizations, like Bitfinex, Factom, Synereo and also the MaidSafe Foundation.
What Makes Tether Unique?
USDT’s feature that is distinctive is the point that its value is actually guaranteed by Tether to remain pegged to the U.S. dollar. According to Tether, whenever it issues new USDT tokens, it allocates the same amount of USD to the reserves of its, therefore ensuring that USDT is fully backed by cash and cash equivalents.
The famously high volatility of the crypto markets means that cryptocurrencies are able to rise or perhaps fall by 10 20 % within a single day, making them unreliable as a store of value. USDT, on the other hand, is actually protected from these fluctuations.
This property makes USDT a safe haven for crypto investors: during periods of high volatility, they can park the portfolios of theirs in Tether without having to completely cash out into USD. In addition, USDT provides a very simple way to transact a U.S. dollar equivalent between regions, countries as well as continents via blockchain – and never have to count on a slow and expensive intermediary, like a bank or even a financial services provider.
Nevertheless, over the years, there have been a number of controversies regarding the validity of Tether’s claims about their USD reserves, at times disrupting USDT’s price, which went down as low as $0.88 at one point in its history. Many have raised concerns about the fact that Tether’s reserves have never been fully audited by an independent third party.
The Reason For Tether’s Market Cap Growth
While speculators have speculated about Tether’s credibility all along, the stablecoin has managed to cut through the noise and grow. In reality, looking at Tether’s growth makes sense, since the need for Bitcoin.
Lately, institutions have found their favorite alternative investment asset and are heavily investing in it. This on boarding takes one of 2 things, USD or perhaps USDT. While it’s apparent that the USDT market far surpasses the USD market, it’s also clear that institutions won’t have used the fiat markets.
This partly describes the market cap development of Tether in 2019, and even in 2020. As much as 2021 is actually concerned, since Bitcoin blasted through the roof in the second and first weeks of 2021, more and more USDT has been minted.
In 2021 alone, Tether minted a record two billion dollars in a single week, with $1.5 billion minted the week before that. With the market cap hitting a whopping twenty five billion dollars at the time of thsi writing, one can observe that the total market cap of Tether has grown by 19% in only fifteen days.
References & Resources:
- The impact of Tether grants on Bitcoin. WC Wei – Economics Letters, 2018 – Elsevier
- From Tether to Libra: Stablecoins, Digital Currency and the Future of Money. A Lipton, A Sardon, F Schär, C Schüpbach – arXiv preprint arXiv …, 2020 – arxiv.org
- Is Bitcoin really untethered? JM Griffin, A Shams – The Journal of Finance, 2020 – Wiley Online Library
- Digital Currencies and the Common Good: Models and Coopetition. J TIROLE – 2020 – bankofcanada.ca
- Price discovery in cryptocurrency markets. I Makarov, A Schoar – AEA Papers and Proceedings, 2019 – aeaweb.org
- Return And Volatility Spillover Effects In Leading Cryptocurrencies. S Palamalai, B Maity – Global Economy Journal, 2019 – World Scientific
- Are Cryptocurrencies a Safe Haven for Equity Markets? An International Perspective from the COVID-19 Pandemic. T Conlon, S Corbet, RJ McGee – Research in International Business and …, 2020 – Elsevier
- The influence of stablecoin issuances on cryptocurrency markets. L Ante, I Fiedler, E Strehle – Finance Research Letters, 2020 – Elsevier
- An empirical analysis of cryptocurrency trends for financial decisions. JY Kim, M Kang, LJ Park, Y Kim – Scientific and practical cyber …, 2018 – journal.scsa.ge