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The market capitalization of Tether (USDT), a stablecoin pegged to the US dollar, has increased in recent weeks, potentially helping fuel the recent rally in Bitcoin (BTC) which has brought prices close to all-time highs.
Paolo Ardoino, who acts as double CTO of Bitfinex and Tether, tweeted On Thursday USDT’s supply increased by 1 billion in nine days, marking the second fastest expansion in its history. The record was set on September 4, 2020 when, in eight days, USDT’s outstanding supply increased by 1 billion.
At press time, Tether had a market capitalization of nearly $ 19 billion, which means there is about $ 19 billion in circulation at a price of $ 1.00.
Tether’s market cap has increased nearly fourfold since the start of 2020, according to data from CoinMarketCap.
At current offering, Tether has the fourth largest market capitalization of any cryptocurrency.
USDT and other so-called stablecoins offer fiat onramp to cryptocurrency markets, thereby minimizing price volatility and ensuring easy redemption once digital assets are sold. Although the USDT is allegedly backed by real US dollar reserves, Tether has never produced a full audit of its bank accounts.
In 2019, a Bloomberg report stated that Tether’s USDT was not fully pegged to the dollar, but rather that the circulating supply is only supported by 74% in cash and short-term securities.
Tether is also managed by the same management group that oversees Bitfinex, one of the largest cryptocurrency exchanges in the world. It has been claimed that Tether and Bitinex manipulated the 2017 bull market, although proving that claim is difficult due to the complex nature of decentralized cryptocurrency markets.
Legal experts informed Cointelegraph earlier this year that the scope of market manipulation in such a new asset as Bitcoin will be difficult to establish.
Meanwhile, Tether remains the dominant stablecoin in the industry, accounting for more than three-quarters of the stablecoin market capitalization.
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