Crypto stablecoin Tether (USDT) has reached a historic milestone, surpassing a market capitalization of $100 billion.
This new development highlights a remarkable 9% year-to-date growth, which further solidifies its dominance over its closest competitor, USD Coin (USDC).
On March 4, Tether briefly attained the $100 billion mark in market capitalization, which showcases its resilience amidst market fluctuations. However, data from CoinMarketCap suggests that Tether has yet to breach this milestone on other platforms.
The significant gap between Tether and its nearest rival, USDC, which is issued by Circle, underscores Tether’s unparalleled position in the stablecoin market. Tether’s market capitalization places it in the league of major corporations like British oil giant BP and e-commerce titan Shopify.
Tether functions as a cryptocurrency pegged to the value of the US dollar and operates across 14 blockchains and protocols. With a market capitalization ranking it as the third-largest cryptocurrency, behind Ether (ETH), Tether has emerged as a crucial asset for traders seeking stability amidst the volatile crypto landscape.
In recent months, the cryptocurrency market has experienced a resurgence, with its total market capitalization surpassing $2 trillion. This resurgence coincides with Bitcoin’s price surge, reaching highs not seen in two years.
Behind the scenes, Tether claims to back each USDT token with a 1:1 reserve of yield-bearing U.S. Treasury Bills (T-Bills), ensuring stability and reliability. The company reported record profits in the fourth quarter of 2023, with a substantial portion attributed to its T-Bills holdings.
However, concerns have arisen regarding the quality of assets backing USDT, prompting Tether to take measures to mitigate risk, according to Cointelegraph. Despite pledges to reduce lending from its reserves by the end of 2023, Tether still holds significant loans on its books. Nevertheless, the company remains committed to reducing these loans to zero by 2024.
It is worth noting that a notable portion of USDT is currently issued on the Tron blockchain, a platform highlighted in a United Nations report for its association with cyber fraud and money laundering activities. Tether has defended its position, emphasizing its collaboration with law enforcement and the token’s traceability.
