Tether’s USDT stablecoin has once again marked a significant milestone, surpassing a market capitalization of $100 billion. According to data from CoinGecko, on March 4th, USDT briefly reached this remarkable milestone, demonstrating a noteworthy growth of 9% year-to-date.
In comparison to its closest competitor, USD Coin (USDC) issued by Circle, Tether maintains a substantial lead of over $71 billion in market cap. While Tether’s achievement is acknowledged by CoinGecko, other data sources such as CoinMarketCap are yet to reflect the $100 billion market cap.
The significance of Tether’s market cap becomes apparent when comparing it to established entities. With its market cap now parallel to British oil and gas giant BP, and slightly above e-commerce behemoth Shopify, Tether has cemented its position as a key player in the crypto market.
Functioning as a stablecoin pegged to the value of the United States dollar, Tether is accessible across 14 different blockchains and protocols, as stated on the official Tether website. Currently ranked as the third-largest cryptocurrency by market capitalization, Tether trails only Bitcoin and Ether.
Tether has emerged as an indispensable asset for crypto traders seeking stability amidst market volatility. Its blockchain-based nature has attracted a significant user base, solidifying its role in the crypto ecosystem.
The recent resurgence of the crypto market, with a total market cap exceeding $2 trillion, has been particularly notable. Bitcoin has seen a remarkable 50% price surge, reaching levels not witnessed in two years.
The company behind USDT, Tether, claims to back each token with independently audited reserves, predominantly comprising yield-bearing U.S. Treasury Bills (T-Bills). In the fourth quarter of 2023, Tether recorded a record quarterly profit of $2.85 billion, with $1 billion attributed to its T-Bills holdings. This positions the company as one of the world’s top purchasers of U.S. government debt.
However, concerns regarding the quality of assets backing USDT have persisted within the crypto space. In response, Tether has taken steps to reduce exposure to higher-risk assets. Despite aiming to cease lending funds from its reserves by the end of 2023, Tether still had $4.8 billion in loans on its books by the year’s end. The company pledges to eliminate these loans entirely in 2024.
It’s noteworthy that over 50% of the currently issued USDT is based on the Tron blockchain. Recent reports from the United Nations have highlighted Tron’s popularity among cyber fraud and money laundering activities in Southeast Asia. Tether, however, refutes these claims, stressing its collaboration with law enforcement and the traceability of its token.
In response to the UN report, Tether underscores its collaboration with global law enforcement agencies, including the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI), and the United States Secret Service (USSS), which has resulted in advanced monitoring capabilities, surpassing traditional banking systems.