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 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.