While hard facts on trading volumes are impossible to find, recent data from CoinMarketCap.com highlight that even with a 30 times smaller market capitalisation Tether is the token with the highest monthly trading volume. Tether’s volume firstly surpassed bitcoin in April and ever since exceeded the trading volume of other cryptocurrencies. While Bitcoin still has the largest market capitalisation, Tethers current trading volume is around 20 percent higher than the one of Bitcoin (CoinMarketCap.com 2019).
Currently, Tether is the worlds most traded stablecoin, which is a special category of tokens that try to reduce fluctuations through currency pegs or reserves, which lays out the start for interested traders into the cryptocurrency market. This is especially valuable for countries where cryptocurrencies are forbidden, as people can simply exchange cash for the cryptocurrencies. They then can exchange Tether for other currencies such as Bitcoin or XRP and therefore get access to all other types of cryptocurrencies (Muriuki, 2019) .
Even though, Tether is the most traded cryptocurrency by volume, many people don’t even know that they make use of the stablecoin, as it is governed in an impermeable way. Unlike Bitcoin, which has no central bank nor a main owner, Tether belongs to a privately owned company which is based in Hong Kong – Bitfinex. Therefore, the exact way, how the tokens supply is raised or cut is unknown to all of its stakeholders. So far Tether is also not independently audits which increased the concern and the blurred lines around the token. In May 2019, lawyers admitted that the currency is not 100 percent backed with cash, however the current market does not seem to care (Alper, 2019). This admission was rather forced than voluntarily, as Tether is being sued by the city of New York, for previously hiding the loss of more than $850 million of corporate funds and other clients (Kharif, 2019).
However, the tumults of the past months do not seem to slow down the volume of trade. It seems that, the currency might bring its risks to the table but somehow, outweighs its downsides and keeps its acceptance and trust in the market. So what comes next – will Tether also outweigh bitcoin in form of importance?
References:
Alper, T. (2019). “Crypto Market Ignores Tether’s Backing News”. Available at: https://cryptonews.com/news/crypto-market-ignores-tether-s-backing-news-3782.htm [Accessed 4 Oct. 2019].
CoinMarketCap (2019). “Monthly Volume Rankings (Currency)”. Available at: https://coinmarketcap.com/currencies/volume/monthly/ [Accessed 5 Oct. 2019].
Kharif, O. (2019). ”The World’s Most-Used Cryptocurrency Isn’t Bitcoin”. Available at: https://medium.com/amcgroup/the-worlds-most-used-cryptocurrency-isn-t-bitcoin-70c2f4bcd48a [Accessed 3 Oct. 2019].
Muriuki, W. (2019). “Could Tether Be the World’s Most Used Cryptocurrency Ahead of Bitcoin?”. Available at: https://www.coinspeaker.com/tether-worlds-most-used-cryptocurrency-bitcoin/
Perez, Y. (2019). “Dollar-pegged stablecoin Tether is now the world’s 4th biggest cryptocurrency”. Available at: https://thenextweb.com/hardfork/2019/09/25/dollar-pegged-stablecoin-tether-is-now-the-worlds-4th-biggest-cryptocurrency/ [Accessed 4 Oct. 2019].
Rick, D. (2019). “Crypto Community Reacts to Tether Admitting USDT Not Fully Backed”. Available at: https://www.newsbtc.com/2019/04/30/crypto-community-reacts-to-tether-admitting-usdt-not-fully-backed/ [Accessed 3 Oct. 2019].
