Dollar-backed stablecoin Tether (USDT) tied for all-time highs despite the stablecoin market shrinking.
USDT’s market capitalization reached $83.2 billion on June 1, matching the peak reached about a year ago, publisher Tether said. In May 2022, the Terra blockchain collapsed, recovering about $18 billion lost in the subsequent market downturn.
USDT’s move runs counter to a 14-month contraction in the stablecoin market.
USDT has benefited greatly from the plight of its biggest rival. USD Coin (USDC), the No. 2 stablecoin by market capitalization issued by Circle, was hit in March by the collapse of Silicon Valley Bank, where the company held a large amount of its reserves. Losing the dollar peg for a while (which was quickly recovered) still weighs on me.
Binance USD (BUSD), which once boasted a market capitalization of around $20 billion, was virtually doomed in February when New York regulators asked its issuer, Paxos, to stop issuance. was
Tether has long been criticized for its lack of transparency about its reserve assets, including risky loans to undisclosed debtors.
However, USDT’s popularity rose at a time of turmoil in the cryptocurrency industry, with market share at its highest in at least the last 22 months, as stablecoins are perceived as safe amid US regulatory actions and bank volatility. It is standard.
Conor Ryder, an analyst at crypto research firm Kaiko, said, “The rise of Tether (USDT) is a major concern for most stablecoin holders, as the stability of the dollar peg far outweighs the transparency of the issuer. It shows that it is important,” the report said.
Last month, Kaiko questioned USDT’s “unusual” market cap growth, arguing that it was inconsistent with trading volumes plummeting to multi-year lows. The market capitalization of other stablecoins roughly correlates with their trading volume.
Tether chief technology officer Paolo Ardoino attributed the difference to USDT being used primarily for payments in developing countries, where around 40 transactions now take place. , he told web media The Block.
｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
｜Original: Tether Market Cap Climbs to All-Time High of $83.2B, Even as Stablecoin Market Sinks