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Tether’s market value increased by $1 billion in 9 days. Is it the driving force behind the recent Bitcoin price surge?
The market value of the US dollar-pegged stablecoin Tether (USDT) has soared in recent weeks, which may have helped push the price of Bitcoin (BTC) to near historical highs recently.
Bitfinex and Tether CTO Paolo Ardoino said on Twitter on Thursday that the supply of USDT increased by $1 billion in nine days, the second fastest increase in its history. The highest record was set on September 4, 2020, when the circulating supply of USDT increased by $1 billion in 8 days.
As of press time, Tether’s market value is close to 19 billion U.S. dollars, that is to say, there are approximately 19 billion U.S. dollars USDT in circulation at a price of 1 U.S. dollar.
CoinMarketCap data shows that Tether’s market value has increased nearly four times since the beginning of 2020.
Judging from the current circulating supply, Tether’s market capitalization ranks fourth among all cryptocurrencies.
USDT and other stable currencies provide legal currency entry for the cryptocurrency market, thereby minimizing price volatility and ensuring easy exchange of digital assets once they are sold. Although USDT is believed to be pegged to real dollar reserves, Tether’s bank accounts have never been fully audited.
In 2019, a Bloomberg report stated that Tether’s USDT is not fully pegged to the US dollar, but cash and short-term securities support 74% of its circulating supply.
Tether is also operated by the same management group that oversees Bitfinex, one of the world’s largest cryptocurrency exchanges. It is alleged that Tether and Bitinex manipulated the 2017 bull market, but due to the complexity of the decentralized cryptocurrency market, it is difficult to prove this claim.
Earlier this year, legal experts told Cointelegraph that it is difficult to determine the scope of market manipulation for this novel asset like Bitcoin.
At the same time, Tether is still the dominant stablecoin in the crypto industry, accounting for more than three-quarters of the total market value of stablecoins.