On October 21, Tether’s USDT stablecoin achieved a significant landmark by crossing a supply of $84 billion. According to data from Messari, there’s been an approximately $1 billion surge week-over-week, aligning with the current market upswing. This positive momentum is largely driven by hopeful sentiments surrounding the potential green light for a Bitcoin spot exchange-traded fund (ETF) in 2023.
Resilience Amid Market Challenges
Last year, amidst the turmoil that saw the downfall of crypto entities like FTX and Three Arrows Capital, Tether’s market value receded to $66 billion. Doubts also surfaced regarding the robustness of its financial backings.
However, Tether showcased tenacity. Over this year, it amplified its token supply by a staggering $18 billion. This growth can be ascribed to a combination of favorable market conditions and challenges faced by its competitors, notably Binance USD (BUSD) and USD Coin (USDC).
Further cementing Tether’s dominance earlier this year were regulatory actions targeted at its competitors. The New York Department of Financial Services instructed Paxos, the overseer of BUSD, to suspend new token creation.
Following that, the U.S. Securities and Exchange Commission labeled BUSD as a security. These developments triggered a precipitous drop in BUSD’s supply, plummeting from a zenith of $22 billion in November 2022 to a mere $2 billion currently.
Market Dominance Bolstered by External Factors
USDC, another contender in the stablecoin arena, grappled with challenges when it was disclosed that it had ties to the now-defunct crypto-friendly Silicon Valley Bank. Even though USDC managed to recover from a temporary depegging incident, its circulation has been on a steady decline, despite favorable market conditions. These factors bolstered Tether’s ascent and consolidated market leadership, with data from DeFillama revealing that it now boasts an impressive market share of almost 70%.
Tether’s CEO, Paolo Ardoino, took to social media platform X to mark the occasion with an “84B $USDt” post, highlighting the significant achievement.
Looking at the larger cryptocurrency landscape, Tether’s USDT reaching the $84 billion mark isn’t just a numeric landmark. It epitomizes growing investor trust in the stablecoin as a reliable refuge, especially at a time when other alternatives are grappling with regulatory and financial challenges. This progression might also be a testament to a more hopeful overarching market sentiment.
