The most controversial cryptocurrency and stablecoin Tether has created more than 250 million USDT tokens. The tokens are worth aroun 300$ million, as the issued cryptocurrencies are worth always around a dollar on a 1:1 ratio. On coinmarketcap you can see that the USDT tokens were created between 17th and 18th May and the total supply of Tether tokens is now more than 2.5$ billion.
The created tokens can be seen on the graph below, as the blue line indicates the total market cap of the stablecoin and the orange line indicates its price in Bitcoin. The market cap increases by almost 300$ million, which can only mean that more USDT tokens are created. The cryptocurrency is always a dollar after all.
Tether has been criticized before for creating tokens, as this is not their first time doing this. The last time was as recently as 20th March. The company released 300 million new USDT tokens and 86 million new in February. Many critics do not believe that all 2.5 billion USDT tokens are backed by an actual US dollar and have criticized them for their lies. The company had promised that the total circulation of USDT would not exceed 1.9 billion, but they lied a couple of times.
The company was also criticized for not being transparent with their whitepaper and business plan. They cut ties with the auditing company Friedman LLP before even an audit could be conducted. For now there is no evidence that every USDT token is backed by the US dollar. One of Tether’s biggest critics, the blogger Bitfinex’ed who pointed out that every time Tether “prints” new tokens, the leading cryptocurrency prices increase. If you look at the graphs, Ethereum and Bitcoin’s prices increased at the same time that the new tokens were created.
The blogger decided to stay anonymous understandably, as Bitfinex, one of Tether’s sister companies, has threatened repeatedly to sue critics like Bitfinex’ed for doubting Tether’s dollar-backed stablecoins. A statement, that can’t be proved without an actual audit. Still, USDT has been leading the stablecoins and was a monopoly for a long time.
What is Tether?
The cryptocurrency Tether (USDT) is a token that should allegedly be backed by a US dollar on a 1:1 ratio for all issued coins. Tether’s name comes from the tokens being “tethered” to the value of the United States dollar. It is also a stablecoin and is not an investment because of the depreciation of the United States dollar over time due to unlimited printing and inflation. Still the stablecoin provides a lot of options to cryptocurrency traders.
There are some features to the stablecoin, which makes it suitable for cryptocurrency traders. There are no fees for sending funds between wallets and Tether’s stability proves benefitial when the markets are falling. Many investors use the stablecoin to hedge their investments and this can be seen when analyzing cryptocurrency charts. It’s enough to know that USDT is second in trading volume, after Bitcoin, so many traders are actually using the cryptocurrency.
But Tether is not the only contender with stablecoins. New players are emerging like Circle, who is backed by Goldman Sachs, Basis and TrueUSD are attacking Tether’s cryptocurrency market share. TrueUSD was recently added to the world’s largest cryptocurrency exchange, Binance. We should expect a boost in volume for TrueUSD and more use cases.
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