Stablecoin USDT, the crypto stablecoin known as Tether, has reached a record-breaking market capitalization of $100 billion, showing a 9% increase year-to-date. This achievement widens the gap between USDT and its closest competitor, USDC, which currently stands at $1.00.Â
On March 4, USDT briefly hit the $100 billion milestone, with its market capitalization fluctuating based on price and supply. USDT’s cap is now over $71 billion higher than USDC, issued by Circle, which has also experienced growth this year.
However, Tether has not yet surpassed the $100 billion mark on alternative platforms like CoinMarketCap.
Tether’s market capitalization puts it on par with BP, the British oil and gas giant, and slightly above Shopify, the e-commerce behemoth.
According to Tether’s website, it is a cryptocurrency that is tied to the value of the US dollar and can be found on 14 different blockchains and protocols.
The third-largest cryptocurrency by market capitalization after Ether (ETH) has seen a significant increase in value, with tickers down to $3,510. It has become a popular choice for traders looking for a stable asset in the blockchain-based crypto market.
In recent weeks, the overall crypto market has rebounded to a market cap exceeding $2 trillion. Bitcoin (BTC) has also experienced a surge in value, with tickers down to $65,174, marking a 50% price increase and reaching two-year price highs.
The company behind the token, Tether, ensures that each USDT token is backed 1:1 by its audited reserves, mainly consisting of yield-bearing U.S. Treasury Bills (T-Bills) – short-term loans to the U.S. government.
During the fourth quarter of 2023, the company reported a record quarterly profit of $2.85 billion, with $1 billion coming from its T-Bills. The company’s report revealed holdings of over $80 billion in T-Bills, and it has previously claimed to be one of the largest purchasers of U.S. government debt globally.
The crypto community has expressed worries about the quality of assets supporting USDT, prompting Tether to take steps in minimizing its risk exposure to certain assets.
In late 2022, Tether announced its commitment to cease lending funds from its reserves by the end of 2023. However, this goal was not achieved, as Tether still had $4.8 billion in loans by the end of 2023, albeit $1 billion less than the beginning of the year. Tether assures that these loans are fully backed and has vowed to eliminate them entirely by 2024.
More than half of the USDT in circulation is currently on the Tron blockchain, which a January United Nations report highlighted as a popular choice for cyber fraud and money laundering activities in Southeast Asia.
Tether responded to the report by emphasizing its collaboration with law enforcement and the traceability of its token, aspects which the UN report allegedly failed to acknowledge.U