Tether’s total offering, which has experienced rapid growth since 2017, reached a new all-time high, and all suggest that Ethereum is partly responsible for what happened.
Tether’s total offering reached an all-time high of 4.27 billion units. Ethereum is one of the main factors of growth in this offer, and this is because, although late 2017 Tethers could already be broadcast on the Ethereum blockchain, but it was not until earlier this year that ethereum began to influence the strong total supply growth.
Reasons driving Ethereum
At the time of writing, the total offer is 4.1 billion Tethers, of which 2.54 billion were created on the Omni Blockchain, and 1.56 billion created on the Ethereum Blockchain. Ethereum’s growing interest in Tether could be guided by a variety of factors; Tether Limited, Tether’s administrator, could try to reduce the risk of continuity by limiting reliance on Omni and Bitcoin.
On the other hand, the main use of Tether is trading and arbitration, and for this type of use Tether could be more practical by generating blocks every 15 seconds on Ethereum, compared to blocks generated every 10 minutes in Bitcoin, not to mention that the confirmation times of deposit withdrawals for tokens created on Ethereum are faster compared to Bitcoin.
Considering that the above features may be quite attractive among active traders, it is not far-fetched to think that the issuance of Tether on Ethereum continues to grow in relation to the Omni issuance. In addition, this creates the perfect scenario for market demand for the tether to increase progressively.
The growing market preference for Tether is evident when we remember that despite the creation of new tokens anchored to the price of the dollar; such as TrueUSD, Paxos, USD Coin, Dai, Gemini Dollar, and StableUSD; The Tether’s dominance among its competition has always been superior. Currently, the token stands at 81.77% dominance in the market with respect to its competition.
Could Tether influence the price of Bitcoin?
The relationship between the issuance of Tether with respect to the price of Bitcoin is a disturbing topic in the ecosystem, due to the lack of clarity about USDT’s financial statements and the direct relationship with Bitfinex. The New York prosecutor’s office filed evidence against Tether and Bitfinex in the Supreme Court for allegedly masking $850 million losses. And while they also showed that the token was not fully backed by the dollar, it was unaffected as far as its growth was concerned.
Due to the gray area in which Tether is located as a quote currency for exchanges in exchanges, there are two scenarios in which you might think that the price of Bitcoin could be affected: when investors buy Tether using fiat money for market volatility, which increases token issuance and demand; and if Tether Limited comes to issue tokens independently, this will increase the total market supply.