In the last two years since the initial bear market after the bull market in 2017, stablecoins have been very popular. Today, statistics show that the market value of all well-known stablecoins today is hovering above US$23.9 billion. Among the more than 30 stablecoins in 2020, the tether is still a behemoth, accounting for 76.15% of the entire market. Since January 2016, the market value of the stablecoin chain has grown from US$951k to US$18.5 billion, an increase of 1.9 million%.
Tether’s market value rose from one million to over $18 billion in four years
So far, the stable currency chain (USDT) is currently the most widely used token linked to the US dollar. Since its establishment, the project has been developed on a large scale. At the time of launch, the token USDT was issued on the Bitcoin blockchain using the Omni Layer Protocol on October 6, 2014, 2236 days ago.
However, since stablecoins were originally issued on Ethereum using the ERC20 standard, nowadays, tethers are issued on countless blockchains. After Ethereum, tethers were minted on Tron, Bitcoin Cash, EOS, Liquid and Algorand. It has also been announced that USDT will also be launched on the Solana Layer 1 blockchain.
Tether has been controversial for many reasons, but no one can deny how prominent stablecoins have been in the past few years. USDT received almost no attention in the first two years. In 2016, stablecoins ranked 30th in terms of market value and became even more noticeable.
Statistics show that Binance and Huobi Global are the top two exchanges to exchange USDT today. As of November 21, 2020, the concentration of USDT holders is 29%, and the price correlation between USDT and BTC is -0.37. In the past 7 days, the regional record of USDT transaction volume exceeding USD 100,000 shows that USD 16.1 billion has been settled last week. 45% of USDT transactions are from the Western Hemisphere, while 55% are from the Eastern World.
On January 3, 2016, the market valuation of the stablecoin chain was only $951,600. USDT’s trading volume within 24 hours is only $139,000. USDT’s issuance reached 18.5 billion US dollars, a substantial increase of 1.9 million% in just four years.
Tether’s growth rate surged from US$951,000 in 2016 to US$9.95 million in the following year on January 1, 2017. The stablecoin also managed to squeeze more positions, ranking 25th in market capitalization.
In January 2018, after the bull market in 2017, compared with more than 5,000 crypto assets, Tether’s market position dropped to 37th in terms of overall valuation. At that time two years ago, there were 43 crypto assets with a cryptocurrency market value of over 1 billion U.S. dollars, and USDT had a market value of 1.47 billion U.S. dollars.
Another year passed, and on January 6, 2019, Tether (USDT) ranked 8th among the top ten crypto assets in January. Coins in circulation only increased from 1.47 billion in the previous year to 1.91 billion in the first month of 2019.
One year later, the market value of Tether (USDT) increased from $19 billion by more than 115%, reaching $4.1 billion on January 5, 2020. Since then, stablecoins have undergone tremendous expansion, and their overall valuation has increased by 343% to today’s $18.5 billion.
According to USDT’s wallet transparency page, the company has issued 18,539,604,170 tethers since October 2014. In addition, there is EURT circulation and tether gold of 40,001,800 euros. There are 48,450 Tether Gold (XAUT) tokens in circulation, bringing the market value of Tether Gold to US$92 million. After the surge in cryptocurrencies in 2017, tether (USDT) competed in the form of rival stablecoins.
Competing stablecoin competitors include USDC ($2.7B), DAI ($1B), BUSD ($679M) and PAX ($399M). At the same time, each competitor has a different type of plan to peg the U.S. dollar, whether it is traditional mortgage or over-collateralization, such as DAI stable currency. There are other fiat currency fixed tokens linked to international currencies, such as the euro, renminbi, and yen. Although very rare, some stablecoin tokens eventually lost the exchange rate pegged to the U.S. dollar, such as the latest issuance of stablecoin digits (USNBT) and the OUSD of the Origin protocol.
Tether is controversial because of its incredible growth, and the company has been fighting with the office of Attorney General Letitia James. “Our investigation has determined that the operators of the’Bitfinex’ trading platform also control the’tether’ virtual currency, and they have carried out cover-ups to cover up the obvious loss of US$850 million in customer and company funds.”, the then Attorney General James said.
In addition, the company Tether told the public that USDT tokens are backed by U.S. dollars at a ratio of 1:1. However, the company subsequently admitted that the token was backed by 74% of the U.S. dollar and the rest received other forms of collateral support.
Tether Operations Limited also responded to the attorney general’s allegations and firmly denied what the company considered “false claims.”
Tether stated on April 26, 2019: “Bitfinex and Tether have fully cooperated with the New York State Attorney General’s Office because both companies maintain cooperation with all regulatory agencies. The New York Attorney General’s Office should focus its work on We are trying to provide help and support in our recovery efforts.” The company added:
Bitfinex and Tether are financially strong-stop loss. And Bitfinex and Tether are committed to this excessive confrontation with the New York Attorney General’s Office in order to fight against companies that are good corporate citizens.
Although the attorney general raised all the disputes and the doubters expressed dissatisfaction with it, USDT is still prospering month by month. Today, in terms of market value, this encrypted asset has become the third largest blockchain, and it seems that it will not disappear soon.
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