- March 4, 2024
- Posted by: [email protected]
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Tether’s USDT has achieved a significant milestone, surpassing the $100 billion market capitalization mark on March 4, marking a watershed moment for the popular stablecoin. CoinGecko data reveals an impressive year-to-date growth of 9%, consolidating Tether’s position as a stalwart in the crypto market. Notably, Tether’s market cap maintains a substantial lead, exceeding $71 billion compared to its closest competitor, USD Coin (USDC), which, too, has experienced notable growth this year.
While CoinGecko reflects Tether’s accomplishment, other platforms, such as CoinMarketCap, are yet to mirror the $100 billion market cap, emphasizing the diversity and nuances within the crypto data landscape.
Tether’s ascent in market cap places it shoulder to shoulder with industry behemoths like British Petroleum (BP) and slightly above e-commerce titan Shopify, underscoring its integral role in the broader financial ecosystem. Operating on 14 different blockchains and protocols, Tether holds the distinguished position of being the third-largest cryptocurrency by market capitalization, trailing only Bitcoin and Ether.
The stablecoin’s prominence is amplified by its role as a stabilizing force in the volatile cryptocurrency market. Amid a recent resurgence that has seen the overall market cap exceed $2 trillion, Tether has proven instrumental for traders seeking stability. The crypto market’s upswing, particularly with Bitcoin witnessing a 50% surge, underscores Tether’s resilience and appeal in times of market turbulence.
Behind Tether’s success is its parent company, also named Tether, which asserts that each USDT token is backed by independently audited reserves, primarily yield-bearing U.S. Treasury Bills (T-Bills). In the fourth quarter of 2023, Tether reported a record quarterly profit of $2.85 billion, with a significant portion attributed to its holdings in T-Bills. This financial strategy has positioned Tether as a major player in purchasing U.S. government debt.
Despite its triumphs, concerns regarding the quality of assets backing USDT linger within the crypto space. In response, Tether has taken proactive measures to minimize exposure to higher-risk assets. Although the initial objective of ceasing lending funds from its reserves by the end of 2023 was not fully realized, with $4.8 billion in loans still on the books, Tether maintains that these loans are fully collateralized and commits to eliminating them entirely in 2024.
A noteworthy aspect of Tether’s narrative is its reliance on the Tron blockchain, with over 50% of currently issued USDT based on this platform. Recent scrutiny arose from a United Nations report highlighting Tron’s popularity in cyber fraud and money laundering activities in Southeast Asia. Tether vehemently refutes these claims, emphasizing its collaborative efforts with global law enforcement, including the Department of Justice, the Federal Bureau of Investigation, and the United States Secret Service. The company asserts that its collaboration results in unparalleled monitoring capabilities, surpassing traditional banking systems, and underscores its commitment to transparency and regulatory compliance in the evolving crypto landscape.
