If you consider bitcoin to be the most used cryptocurrency worldwide, then you are certainly mistaken. However, the total market valuation of bitcoin indeed accounts for 70%, though it does not happen to be the most traded cryptocurrency.
The exact figures of trading volumes are yet to be derived, however, the data acquired from a potential news source says, that Tether has the maximum trading volume taking its daily and monthly transactions into consideration. Despite, Tether holds a market valuation of less than 30%. In April, for the very first time, the trading volume of Tether went above bitcoin, and since then it is growing. The volume went to 21 billion $ at the beginning of August.
Tether has shown its significance in the crypto market with a hike of 18% in the trading volume compared to bitcoin. The concern of traders regarding market manipulations also persists in a significant place of Tether trading.
The co-head of global financial technology at ConsenSys, Mr. Lex Sokolin said, “there is a major possibility of losing a trading volume of more than 1 billion $ if Tether is removed from the crypto market. ConsenSys is a blockchain technology firm. He added that possibly there will be a fall of potential trading patterns in the market if it happens.
With the use of pegs and reserves, Tether is one of the most stable coins as it can counter fluctuation of price. Also for active traders of the world, it creates a pathway into the crypto market. As said by Sokolin, the traders in China are allowed to buy Tether for cash, after answering a few questions. Also, they can trade Tether for other cryptocurrencies including bitcoin via trading platforms.
According to CEO of Circle Mr. Jeremy Allaire, Asians admire that there is something exempted from the control of US government. Jeremy belongs to one of the major supporters of the USD coin, which is a rival stable coin.
Tether, after getting sued for illegally blending the funds and reserves by New York, says, to issue as well as redeem the coin, a user has to go through an approval process and a know-your-customer form.
The Asians are inclined towards Tether can be analysed as out of the total trading volume of cryptomarket, Asians account for approximately 70% and in the 2 major crypto exchanges of the world, i.e. Binance & Huobi, the trading volume of Tether accounted for 40% and 80% respectively.
A research scientist of Massachusetts Institute of technology, Thaddeus Dryja said, that most of the people are unaware of their transactions taking place in Tether. This happens as many financial institutions don’t want to bear the risk of money launderers & other criminals, hence they do not hold a bank account and use Tether as an alternative for it.
According to Dryja, people stay with a mind-frame that they have actual dollars, though, in reality, they use Tether, without knowing it. He adds, the customers stay with an impression of holding dollars, as the exchanges mislead them via their pages.
One could assume Tether as a BlackBox, depending on its management and governing method. In comparison to bitcoin which does not belong to a particular firm, Tether belongs to a private company based in Hong Kong. The owners of the company also regulate a crypto exchange named as Bitfinex.
The method of supply of Tether is not known. As the audit of Tether is not at all independent, the supply through fiat reserves is also questionable. Tether has announced that it holds a 100% reserve, though in April they changed their statement and said that cash and current securities cover 74% of total available Tether.
This disclosure was done via New York Attorney General, following the investigation taking place for Tether. This investigation has claimed that the company is trying to hide the loss of 850$ million.
According to the professor of finance John Griffin at Austin’s University of Texas, the Tether was behind the runup of bitcoin in 2017 via market manipulation. The investigation on the role of Tether for market manipulation was taking place last year by the US Justice Department.