News Mar 04, 2024 09:34 AM EST

Tether's USDT Market Cap Reaches Historic $100 Billion Milestone

By April Fowell

With a 9% year-to-date rise and a growing market value above $100 billion, cryptocurrency stablecoin Tether has surpassed its next-largest rival, USD Coin.

(Photo : by JUSTIN TALLIS/AFP via Getty Images)
With a 9% year-to-date rise and a growing market value above $100 billion, cryptocurrency stablecoin Tether has surpassed its next-largest rival, USD Coin.

According to statistics from CoinGecko, USDT briefly reached the $100 billion milestone on March 4. The market capitalization of the cryptocurrency varies depending on the price and supply that are in circulation.

In terms of market capitalization, it is more than $71 billion more than its next rival stablecoin, USDC, which is distributed by Circle and has also shown growth in value this year.

However, other data sources like CoinMarketCap show that Tether has not yet passed the $100 billion mark.

Tether's market capitalization positions it slightly above the e-commerce behemoth Shopify and on par with the British oil and gas tycoon BP.

According to its website, Tether is a cryptocurrency that is based on the value of the US dollar and is accessible on 14 different blockchains and protocols. After Ether, it is currently the third-largest cryptocurrency by market capitalization. It has developed into a significant blockchain-based alternative for cryptocurrency traders in need of a reliable asset.

The cryptocurrency industry has rebounded over the last month, reaching a market capitalization of over $2 trillion, with Bitcoin seeing a 50% price gain and reaching two-year highs.

Read also:The 5 Best Crypto Wallets of 2024

Tether's USDT Backing and Business Practices:

The cryptocurrency's issuer, Tether, asserts that each USDT token is backed 1:1 by its independently audited reserves, which are mostly composed of yield-bearing U.S. T-Bills, or Treasury Bills, are short-term loans made to the US government.

The firm reported a record quarterly profit of $2.85 billion for the fourth quarter of 2023, with $1 billion coming from its T Bills. Its $80 billion worth of T-Bill holdings were revealed in its fourth-quarter report, and it has previously declared itself to be among the biggest global purchasers of US government debt.

In the cryptocurrency world, there has been debate about the quality of the assets supporting USDT. Tether has attempted to lower its exposure to some assets that are thought to carry a greater risk.

Tether promised in late 2022 that it will stop lending money out of its reserves by the end of 2023.

These intentions never came to pass; as of the end of 2023, Tether had $4.8 billion in loans outstanding, however that amount had decreased by almost $1 billion from the beginning of the year. It pledged to reduce the loans to zero in 2024 and asserts that they are completely collateralized.

The Tron blockchain, which according to a January United Nations assessment "has become a preferred choice" for money laundering and cyber crime headquartered in Southeast Asia, is home to more than half of the USDT that is now in circulation.

Tether has retaliated against the findings, stating that the UN neglected to highlight the company's cooperation with law enforcement and the traceability of the token.

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