The market value of the Tether (USDT), a stable currency linked to the US dollar, has risen in recent weeks, potentially fueling the recent Bitcoin (BTC) rally that pushed prices to record highs.
Paolo Arduino, CTO of Bitfinex and Tether, tweeted on Thursday that the USDT exchange rate rose by $ 1 billion in nine days, the second fastest increase in history. The record was set on September 4, 2020, when USDT sales increased by $ 1 billion in eight days.
At the time of publication, the market value of Tether is around $ 19 billion, which means that there is around $ 19 billion in circulation at an estimated $ 1 billion.
According to CoinMarketCap data, Tether’s market value has almost quadrupled since the beginning of 2020.
Tether Market Value by CoinMarketCap
At current exchange rates, Tether is ranked fourth in terms of market value among all cryptocurrencies.
USDT and other so-called stack coins offer legal entry into the cryptocurrency markets, thus reducing price volatility and allowing easy digital exchanges after sales. While US dollars are reportedly backed by real dollar reserves, Tether has never carried out a complete overhaul of its bank accounts.
In 2019, a Bloomberg report argued that USDT Tether was not fully linked to the dollar, but the volume of sales offered was supported by only 74% of cash and short-term securities.
Tether is also run by the same management team that oversees Bitfinex, one of the largest cryptocurrency exchanges in the world. It has been claimed that Tether and Bitinex manipulated the bull market in 2017, although this claim is difficult to prove due to the complex nature of decentralized cryptocurrency markets.
Earlier this year, legal experts told Cointelegraph that it would be difficult to determine the extent to which the market manipulated a new asset such as Bitcoin.
Meanwhile, Tether is still the dominant stablecoin in the industry, accounting for more than three quarters of stablecoin’s market value.