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The controvertible “stablecoin” Tether (USDT) seems to be gaining momentum, regardless of the huge Cumulonimbus clouds of skepticism that hover over it. It was just several weeks ago that Tether had issued $250M-worth USDT tokens and has entered the top 10 largest cryptocurrencies, and just recently it made another digital infusion of newly distributed tokens.
As confirmed by OmniExplorer – the block explorer for the Omni protocol – on August 11, Tether released an additional batch of 50,000,000 tokens out into the crypto market, which a simple mathematical calculation based on Tether’s claim of 1:1 ratio with the USD reveals that another $50M-worth USDT will now circulate in crypto exchanges.
With the recently issued tokens, Tether’s trading volume spiked significantly; in fact, Tether’s last 24-hour trading volume is now ranked 2nd, responsible for nearly 30% of the entire crypto market volume, and ahead of much more established cryptocurrencies such as Ethereum, Bitcoin Cash and Litecoin.
Not all good news for Tether, though. Since peaking at a market capitalization of $2.73B (two point seventy-three billions of dollars) at the beginning of July, Tether’s market cap has dropped by over 10% and currently it’s revolved around $2.45B. It is important to emphasize that Tether’s decline is not as nearly as steep as other recent plunges of other cryptocurrencies, which makes sense when considering that USDT is attached to the USD and therefore is seemingly more resistant to the usual volatility of the crypto market.
Tether is under a lot of public criticism for its lack of transparency and alleged manipulations of Bitcoin price last year. The bigger issue for many crypto enthusiasts is that if Tether would go down, it could also take critical parts of the entire crypto market down with it. From a recent WSJ article, profiling Tether:
Some investors say tether has become systemically important within the cryptocurrency market. “There are a couple of forces in this market that if they failed, it would be catastrophic,” said Ding’An Fei, a managing partner at Ledger Capital, a digital asset investment firm in Beijing. “Tether is one of them.”
Would Tether prove its detractors wrong? Would it lead the crypto world into a catastrophe? Or perhaps its influence is just exaggerated and overblown? Only time will tell, and for cryptocurrencies time usually runs much faster…