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Tether [USDT] CTO Paolo Ardoino says “everyone takes from king” on competitor’s rising market cap

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Tether, the issuer of the stablecoin USDT, has been constantly under regulator’s scrutiny. Over the past couple of months, USDT appears to be shrinking while its competitor USDC advances at a rapid pace. But this exec is not worried.

Paolo Ardoino, who happens to be the CTO of both Bitfinex and Tether, iterated the famous adage “Let everyone grow so that the sum of all voices will be louder,” and asserted that the “stablecoin industry is much more solid [with competitions] around in the long run.”

Taking a jibe at the recent reports regarding USDC “eating away USDT’s market share,” Ardoino clarified that does not mind seeing growth and that he welcomes everyone provided there is a level playing field. His tweet read,

“Everyone at Tether is proud that the idea that they created in 2014 is now copied by many parties. Ain’t good if no one bothers. So we are flattered. Alone is harder to make history. With a bigger representation of stablecoins, we can aim for fairer regulations.”

USDT’s decline in dominance

The dwindling price of the cryptocurrency market has had no effect on the transaction volume of stablecoins. In fact, the figures have stayed widely unfazed. As per Messari’s latest report, stablecoins witnessed impressive growth in the second quarter of this year amidst market-wide sideways movement. In addition to that, stablecoins have reportedly facilitated a staggering $1.7 trillion in transaction volume, meaning a rise of 1,090% year-over-year and 59% since the previous quarter.

USDT, on the other hand, had failed to impress the charts, as the parabolic growth in the market cap of the world’s oldest and largest stablecoin giant came to an abrupt halt in May.

For almost two months, Tether has not issued a single USDT on the Ethereum network. This has been one of the major factors that have affected the asset losing its market dominance. Additionally, China’s renewed crypto crackdown on USDT is another contributor in addition to the mounting regulatory threats.

Stablecoins facilitated an astonishing $1.7T in transaction volume in Q2: Messari

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Stablecoins are non-volatile assets that mostly remained got fresh attention this month after the USDC issuer, Circle revealed its plan to list on the New York Stock Exchange, that too on the same day, when China’s central bank warned about these tokens citing serious risks to global financial systems.

The price of the cryptocurrencies might have taken a backseat, but the transaction volume of stablecoins has remained widely unfazed. According to Messari’s latest report, these tokens saw impressive growth in Q2 this year. In fact, this cohort of cryptocurrencies reportedly facilitated an unprecedented $1.7 trillion in transaction volume, an increase of 1,090% year-over-year and 59% since Q1.

Messari’s Senior Research Analyst, Ryan Watkins noted,

“The stablecoins story continues to rhyme each subsequent quarter – climbing up and to the right.”

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USDT’s dwindling market dominance paves the way for other stablecoins

Watkins also mentioned that the stablecoin monetary base climbed above $107 billion in the second quarter of the year, and was 70% since the first quarter in addition to raking in 803% year-over-year. While Tether [USDT] still leads the figures, its dominance has been dwindling of late, owing to serious controversies that have damaged its reputation. As a result, USDC, BUSD, and DAI have been on a rapid increase. So much so that their market share has applied by 23%, 9%, and 5%, respectively.

USDC, for one, has experienced a tremendous leg up in Q2. Currently, more than 50% of the total supply now sits in smart contracts which is almost equivalent to $12.5 billion. While this share is not as high as DAI, USDC still leads by a wide margin in terms of dollars.

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In addition to that, Messari also observed that the decentralized stablecoins have also maintained a consistent upward trajectory. Fortunately, decentralized tokens such as DAI’s continue to win share from centralized stablecoins. At the beginning of the second quarter, the decentralized ones surged to an all-time high of almost 10% of the total stablecoin supply.

Besides, DAI remained the market leader this quarter with a 61% share of the market. Interestingly, its share had taken a hit in Q1 due to Terra’s rise.

XRP, Tether [USDT] fall back as Dogecoin [DOGE] lands the 4th position

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Dogecoin [DOGE] seemed to be overhauling prominent currencies like XRP as well as the largest stablecoin, Tether [USDT]. The altcoin’s latest move added to the series of surprises the coin had been giving the community over the last year.

The asset had garnered a place below the crypto spotlight, right from the beginning as it caught people’s eye for being associated with a meme. DOGE continued to attain traction after Elon Musk, the founder of SpaceX began endorsing the altcoin as his favorite crypto. GenZ’s interest in the altcoin on the social media platform, TikTok further added to this. The fervor around the coin continues as DOGE was seen climbing up the crypto ladder while pushing prominent cryptocurrencies down.

Just yesterday, DOGE made news after it rose above the USDT. Earlier today, DOGE once again pushed XRP down below to the fifth position.

XRP Bids Adieu To The Fourth Spot

XRP’s tiff with the SEC almost destroyed the cryptocurrency. However, the asset managed to make its way back to the top both in terms of price as well as market cap. The altcoin had regained a place in the top five, while its price soared above $1. XRP’s stay in the fourth position seemed to be temporary as the market cap of DOGE was seen recording new highs.

At the time of writing, the market cap of DOGE was at a high of $89.52 billion while XRP’s was noted at $65 billion. Additionally, Tether’s market cap was at $52 billion. The rise in Dogecoin’s market cap not only helped the asset land the fourth position but also aided in the surge of the overall market cap, which was at $2.25, during press time.

XRP

Furthermore, the price DOGE was also on a roll as it was seemingly aiming for $1. The altcoin was trading for $0.68 with a whopping 56% in the last 24-hours. Over the previous seven days, DOGE reportedly bagged gains of up to 165%. This pump further helped the altcoin garner an array of fans. Several took to Twitter to point out DOGE’s potentials of going to the moon.

Binance Futures Launches YFI/USDT Perpetual Contract as DeFi Demand Surges

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DeFi (Decentralized finance) is currently one of the hottest corners of the crypto industry this year and, as a result of the boom, many project tokens have shown incredible price surges. One of the prominent tokens is Yearn. Finance ‘s native YFI, which has gained significant traction over the last few weeks.

DeFi, the big hype

In a bid to cash in on the mania, several centralized platforms have now jumped on the DeFi bandwagon.

In the latest development, one of the world’s largest centralized cryptocurrency exchange, Binance announced the launch of the YFI/USDT perpetual contract on its Futures platform wherein the users will be able to choose between 1-50x leverage.

The YFI/USDT perpetual contract is a USDT-margined futures contract that uses USDT as collateral. According to the official blog post, the contract will be made available to users from 31st August 7:00 AM [UTC].

This news follows Binance‘s announcement of offering ‘DeFi Index Perpetual Contracts’ to cater to the huge customer demand to get exposure to a broad base of DeFi products.

yearnfinance charts

YFI’s meteoric rise

Meanwhile, in a little over a month, YFI has soared by a staggering 4008% since it was created $764.42 in July to the press time price at $31,682. Following the path of Bitcoin, the creators of the project have limited the supply of the governance token to 30,000 YFI coins. This could be an important contributing factor to the rapid surge in its price.

This new rally was also speculated to be triggered after, one of the largest DeFi protocol, Aave announced the listing the token. This was a significant development for the YFI ecosystem primarily because Aave has successfully outpaced the likes of Maker, Curve Protocol in the race for the first place in terms of TVL.

As previously reported, yet another catalyst for the token’s upward momentum was directed towards a  potential collaboration between the crypto derivative platform FTX and Yearn.Finance.

Besides, the protocol also recently announced the launch of ‘yinsure.finance’ which is essentially a prototype for a new tokenized insurance, the first of its kind in the DeFi ecosystem.

USDT Market Cap Reaches a New Milestone of $12 Billion

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Tether’s market capitalization has soared to new heights, after gaining $1 billion within seven days. Tether revealed on August 14 that the USDT market cap broke past the $12 billion marks, as the demand for stablecoins continues to grow.

Stablecoins like USDT have in the cryptocurrency space continued to gain momentum over time. The increased popularity in stablecoins can be attributed to the ability of coins, often associated with cryptocurrencies, to protect investors and traders against volatility. The dramatic rise in the USDT market cap corresponds to an increase of 140 percent, an additional $7 billion increase since March 2020.

USDT market cap skyrocketing

The swift growth in Tether’s market cap is the impetus behind the 12-months long stablecoins market growth. According to a study by Coin Metrics back in July, the entire stablecoins market took five years to hit $6 billion in market capitalization, but only took four months to increase from $6 billion to $12 billion.

At the time, the study consisted of the entire market for stablecoins. At present, USDT is worth $12 billion on its own. In fact, the other stablecoins on the market are not even close to reaching the milestones set by Tether. On the other hand, the USDC is the closest stablecoin with a total market capitalization of just over $1 billion, followed by the DAI at just under $420 million, and the Gemini Dollar follows the bundle with about $9 million.

Tethers growth impact on Bitcoin

Major cryptocurrency exchanges such as Bitfinex and Binance utilize USDT as an alternative to traditional currencies. Due to this fact, the majority of investors in crypto space depend on Tether to preserve funds in the sides.

Furthermore, USDT is frequently utilized as a hedge against the significant cryptos; it can be argued that Tether’s total supply portrays the capital kept on the sidelines. Some analysts argue the increasing supply of USDT, the weakening of the dollar, on top of institutional adoption; has resulted in a sentiment that the price of BTC could rise. Some of these analysts anticipate BTC to hit new milestones by next year.

Tether will Surpass Ethereum and Take Position #2 by Market Cap

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Bloomberg’s report indicates that Tether(USDT) will take the # 2 spot and overtake Ether by market capitalization. The report, which provided Tether’s future outlook for the month of June, identified Tether ‘s growth as a major driving force for Bitcoin ( BTC). In particular, citing the relevant digital link between blockchain and the US dollar as an important catalyst for blockchain transactions. In addition, Tether provided an urgent need to store value in the world reserve without interference from the middle parties.

Tether (USDT) Overtook XRP

Meanwhile, the report notes that it is only a matter of time before the stablecoin rises to position 2. Recently, Tether(USDT) toppled Ripple (XRP) from third place. Trends in the BTC / USDT chart show that the stablecoin won’t stop any time soon. In fact, the coin is likely to take on Ethereum and move on to Bitcoin. In addition, the report noted how the adoption of tether provided the world reserve currency with a valuable digital proxy.

Past trend analysis noted that the perfomance of Ethereum has always been in sync with the perfomance of Bitcoin. A fact that clearly shows that Ethereum lacks the buoyancy of itself. And it’s only going to operate under the shadow of BTC. In fact, little upsides on the part of Bitcoin have resulted in little or no upsides on the Ethereum trend. Meanwhile, Ethereum is breaking away from its dominant adoption, which benefits from favourable macroeconomic conditions.

US Dollar is Performing Better than Other Major Currencies

On the other hand, the US dollar is winning big against other leading currencies. Despite a massive stimulus package to curb Covid-19, the US dollar has a remarkable perfomance. As such, the US Dollar-linked stablecoins are gaining further traction. Unfortunately, the legal issues facing USDT and major exchanges such as Bitfinex are hindering their future growth.

 

Tether Surpasses XRP to 3rd After Daily Transactions Reach $1.2 Billion in Value

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Tether, the largest stablecoin asset in the digital asset industry, finally took over XRP in the rankings, trailing close behind the asset for about 3 weeks. At the press time, USDT had a total market cap of $8.85 billion, with XRP continuing its close pursuit of $8.71 billion.

The feat was completed on 25 May after Tether had registered an all-time high number of daily transactions. Tether completed a total of 208,107 transactions, estimated to be worth more than $1.2 billion in valuation.

Tether

Tether continues to garner criticism

Although the increase in the market cap is a huge deal, it is inevitable that USDT will continue to receive some flak from the industry. Behind the curtains, the asset is still in the middle of the overhanging court case held by the Supreme Court of New York.

Tether’s crypto tokens are also supposed to be backed 1:1 with the U.S. dollar, but in April 2019 Bitfinex General Counsel Stuart Hoegner admitted that Tether might be backed by only 74 percent cash and cash equivalent.

This is a strong statement to make and considering that it is still valid at the moment, it directly translates into the fact that over $2 billion dollars in Tether are not backed by dollar value. It is also important to note that in April 2019, only $2.8 billion worth of Tether was in circulation, which has tripled over the last 12 months.

Tether’s movement detrimental to Bitcoin

At the moment, the demand for USDT seemed to be running a never-ending course in the industry, but the consequences might start to pile up for the largest digital asset. Bitcoin Maximalist Joe Saz claimed that one of the reasons Bitcoin was unable to reach $10,000 of resistance was due to Tether’s rapid issuance. He suggested that the USDT interferes with Bitcoin’s natural recovery in the charts. He stated,

“Ok, so 10k was the top. We won’t break it until a bottomis in and it’ll take months to establish that due to massive price discovery mutilation caused by inorganic market elements like tether.”

The impact also transcends onto Ethereum, as the largest stable asset has been hoarding the 2nd largest digital asset’s blockchain.   More than 50 percent of the transaction on Ethereum as the moment is transactions based on USDT, according to data from etherscan.io. Over 1.7 million addresses hold USDT in ETH addresses, with the total circulating USDT assets estimated at around $5.8 billion.

Tether Minting Spree Continues with 480 Million USDT Printed So Far in May

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The Tether Minting Spree doesn’t seem to be slowing down any time soon. So far in May, the total number of USDT tokens minted by the Stablecoin giants is equal to the total produced during the first half of April.

Tether mints spree sees 480 million tokens produced

According to the cryptocurrency transaction record firm, Whale Alert, the Tether Treasury has minted five more piles of new USDT tokens in the space of a week. The newly printed amount is USD 480 million, valued at USD 480.4 million. Interestingly, a similar number of USDT tokens were minted in the first 14 days of April.

During April, the Tether Treasury saw its most active period in the production of fresh tokens. The stablecoin developer produced a massive 1.58 billion new USDT tokens last month. The Tether Treasury produced 220 million USDT tokens this week on Thursday 7 May. A further 100 million new tokens have been printed today

If the Tether minting spree continues at this rate, the amount produced in May is likely to double the amount produced last month. At press time, Tether’s total market cap was $8,359,237,890 per CoinGecko.

Tether printing does not influence crypto prices

In general, stablecoins are backed by fiat currency or assets. In the case of Tether, the US dollar is backed at a ratio of 1:1. There are a number of arguments that the production of USDT affects the price of digital currencies.

However, Tether maintains that its production of tokens is down to an increase in market demand. However, a new study asserts that the market entry of fresh stablecoins does not increase the price of digital currencies.

In the case of Bitcoin, its mammoth rally from its March crash in April took place at the same time as the 1.5 billion USDT fresh tokens minting period. Interestingly, BTC’s recent $10,000 increase coincided with the new 480 million Tether Minting Spree.

US Dollar-Backed Cryptos Propelling Ethereum above Bitcoin; Can You See the Red Flags?

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According to coinmarketcap, more than 5360 crypto-assets were present in the ecosystem at the time this article was written. There is no question, however, that Bitcoin and Ethereum have the most significant presence in space.

The comparison between these two digital assets is a never-ending debate, and the proponents of each space have their own set of strong arguments to back up their preferred virtual currency.

Now, according to Messari’s Ryan Watkins, Ethereum could take a step ahead of Bitcoin with its recent development.

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The research analyst indicated that Ethereum’s daily average value has reached parity with Bitcoin, and is actually moving the same amount of money as Bitcoin. It’s an interesting bit of development because back in July 2019, Bitcoin transferred value close to $3.3 billion, while Ethereum moved capital close to $1 billion.

However, it is imperative to note that Ethereum has been able to punch above its weight against Bitcoin because of the unprecedented rise of stablecoins in Q1 2020.

Watkins indicated that despite the pandemic event, the first three months of 2020 were remarkable for stable assets. The collective market cap of all stablecoins crossed $8 billion and, surprisingly, the market cap added in 2019 was less than the figure added in the first three months of 2020.

For Ethereum, it was a disguised blessing as the largest altcoin platform was rapidly becoming the dominant platform to stablecoins issuance and, according to the Messari analyst, it was likely to increase with maturity over time.

ETH 2

At press time, over 75 percent of the total stablecoins were settled on Ethereum’s network and the asset could be beneficial in the future, with the current injection of liquidity. However, this pattern has been brewing since the start of 2019. USDT_ETH has radically overtaken control on Bitcoin’s Omni USDT, and now Tether was settling bulk of their USDT on Ethereum’s platform.

Additionally, 80 percent of the daily transfer value on Ethereum was accounted for by stable assets and they are relatively larger values on average than Bitcoin’s network.

A USD-backed stablecoin sustaining dominance?

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Skew
Source: Skew

Although the development is likely to bring a definite joy to the Ethereum community, it is important to note that stablecoins were still backed with USD, which is a fiat currency.

At press time, USDT’s market was at $7 billion, which is still significantly less than the market cap of Ethereum and Bitcoin, USDT gaining bragging rights might not exactly be what the overall cryptocurrency would like to see in the future.

Ethereum was receiving a definite helping hand from these stablecoins at the moment, but in the long term, if USDT somehow surpasses ETH on market cap valuation, it will be a completely different ball-game at that time.

Ethereum’s Stronghold on Tether Could see BTC Lag Behind in a Crucial Stablecoin Race

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Stablecoin markets have had some of the highest trading volumes in the past month, as the crypto community witnessed an influx of traders entering USDT markets after the market crash on 13 March.

The importance of Stablecoins has never been in question since its introduction back on October 6th, 2014. Over the years, other stable assets have entered the space as well such as USDC coin, PAX and Binance’s recent BUSD coin. However, the dominance of Tether in the stablecoin market is fairly evident and USDT continues to be the top-most traded stable asset.

According to data, after an unceremonious decline on 13 March, bitcoin trading in USDT had tripled in March, surge by more than 180 percent in a month. The same scenario was observed with the US dollar and the Japanese Yen, both trading BTC 2.7 million and BTC 1.8 million.

However, the main tussle for dominance was going on somewhere else. Ryan Sean Adam’s recent post suggested that a stablecoin flipping has been unfolding over the past year, and Ethereum could slowly overtake the reigns as USDT settled on the ETH network that currently holds the monopoly over Bitcoin’s Omni.

Coinmetrics illustrates the superiority of Ethereum issued Tether

According to Coinmetrics recent weekly analysis, it was reported that Ethereum-issued Tether has continued to climb the ladder in terms of utilization. On April 7th, the USDT-ETH registered daily transactions of 143.32k, the highest total since September 2019. The number of USDT_ETH daily transactions also overtook the number of daily transactions witnessed on 13th March, the aftermath of the market crash.

The chart below clearly identifies the high USDT_ETH dominance over Omni Tether (USDT) and Tron-Tether (USDT-TRX) which continued to incur less daily transactions on a regular basis.

ETH USDT

Now, the report suggested that the growth of ETH USD also manifested certain changes in the exchanges. According to data, the total number of Bitcoin held by Bitfinex has been on a downward spiral since April 2nd and BTC Supply has continued to decline by 24 percent over the last month. A similar situation has been observed in BitMEX with a 26 percent decline in BTC supply.

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On the other hand, the accumulation of Ethereum on Bitfinex has undergone a significant increase of 13 percent in the past 30 days, which according to the report, “is a larger percentage increase than any other exchange in our coverage”.

What does it mean for Ethereum in the long-term?

Ryan Sean Adams’ post highlighted another key aspect. For Ethereum the implication of this data can be immense. For starters with DeFi’s growth, Ethereum has already allowed these stablecoin users to access these DeFi apps, which in the next few years could go on to become a massive open finance space.

His report added,

“While it’s possible another network could surpass Ethereum on stablecoin issuance, it’s unlikely that crypto banks will issue on anything other than a credibly neutral platform—that’s why we’re unlikely to see USDC on Binance chain or Tether on a chain controlled by Coinbase.”

At the time of writing this article, a total of 75 percent of the stablecoins presented in the current market were settled on Ethereum.