USDT Market Share Surges Despite Washington’s Scorn
Tether’s stablecoin (USDT) market capitalization hit $81.5 billion on Thursday, reaching its highest point since the Terra collapse in May 2022. This is just $2 billion away from the asset’s all-time high of $83.4 billion, which was set on May 1 last year.
Tether’s market share stands at 63%, data from Blockworks Research shows — its highest point in 2 years. Tether’s stablecoin (USDT) market capitalization hit $81.5 billion on Thursday, marking its highest point since Terra collapse in May 2022. https://t.co/35yqZQnkOE
— Wu Blockchain (@WuBlockchain) April 22, 2023
Tether’s Market Share
Tether has minted $15 billion in new USDT since the start of 2023, seemingly in tandem with a nearly 15% rise in the stablecoin’s market share. This rise was partially due to its nearest rivals, Circle’s USD Coin (USDC) and Paxos-issued Binance USD (BUSD), seeing a disproportionate amount of their on-chain value redeemed for dollars following separate conflicts.
Data from Blockworks Research shows that Tether’s market share stands at 63%, which is its highest point in 2 years. Over a billion USDT was minted on Thursday, though it has not yet entered circulation, according to a tweet from Tether CTO Paolo Ardoino. While the new inventory was earmarked for Ethereum, most USDT lives on Tron, some 45 billion tokens, according to Tether Limited’s transparency page. Native USDT on the remaining blockchain networks where it is issued comprise a tiny fraction of the supply.
PSA: 1B USDt inventory replenish on Ethereum Network. Note this is a authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests and chain swaps.
— Paolo Ardoino 🍐 (@paoloardoino) April 20, 2023
Tether’s “First Mover Advantage”
Tether was among the topics discussed at this week’s House Financial Services sub-committee hearing on stablecoins in Washington, D.C., where the overarching theme was on the lack of federal rules for stablecoin issuers in the United States. Witness Austin Campbell cited the stablecoin’s “first mover advantage” which allowed Tether to become an “entrenched incumbent.” But he also noted the advantage the issuer has in being located outside the United States.
“Tether has not faced the same kind of regulatory uncertainty,” Campbell, an adjunct assistant professor of business at Columbia Business School, said, adding that a lack of transparency into Tether’s reserves puts users of the stablecoin at risk. “But when they are the default option when others are being hamstrung, it’s what people use because there’s demand for dollars on a blockchain.”
Tether has yet to issue its quarterly attestation for Q1 2023, but its continued growth in the stablecoin market underscores the confidence of market participants, even in the face of starkly worded headlines about Tether’s “deception” and Congressional hand-wringing. Tether called the report “outdated, inaccurate, and misleading” in a blog post and asserted that “Tether operates under substantial financial regulations.”
