Despite facing prolonged scrutiny regarding Tether's stability, USDT experienced a rapid resurgence in 2023, capitalizing on the challenges faced by its close competitors. CoinGecko data reveals that Tether's stablecoin briefly reached a historic milestone of $100 billion in market capitalization as the broader crypto market rally unfolded.
While Tether's website reported a token count of approximately 99.5 billion, a slight price premium on some exchanges, exceeding the $1 peg, temporarily propelled the market cap above the $100 billion mark. USDT appears poised to surpass this threshold once again shortly, given its recent growth of $2 billion in supply over the past week. This growth is fueled by the ongoing cryptocurrency trading frenzy, propelling Bitcoin closer to its all-time high.
USDT stands out as the most popular stablecoin, acting as a crucial component in the digital asset market's infrastructure. Functioning as a bridge between traditional fiat money and blockchain-based markets, USDT provides liquidity for trading and lending. It is also gaining prominence in developing regions for transfers and savings, offering access to dollars beyond the traditional banking system.
Tether's origins trace back to 2014 when it introduced a dollar-backed digital currency named "realcoin" on the Bitcoin network. The subsequent rebranding to Tether (USDT) occurred later that year. Since then, USDT has expanded across various blockchains, and Tether has introduced stablecoins pegged to gold and other currencies.
During the 2020-2021 crypto bull market, USDT's market value surged from $4 billion to $83 billion by mid-2022, solidifying its position as the preferred trading pair for cryptocurrency prices on centralized exchanges. Despite this success, the company has faced scrutiny for its opaque reserve management, which initially included risky assets like Chinese commercial paper and exposure to now-bankrupt crypto lender Celsius. Tether's commitment to transparency has evolved, with a shift towards more secure investments such as U.S. Treasury bills, repurchase agreements, and deposits in money market funds. However, concerns persist about the lack of independent audits, necessitating a more in-depth financial analysis than mere attestations.