- USD-backed stablecoins benefit from bear market
- Bitcoin’s volatility saw an increase
- Tether’s controversy still an issue
Cryptocurrency News Today – stablecoin prices have reportedly benefited from the most recent market crash. Millions of USD entered USDT. Meanwhile, Bitcoin’s volatility saw an increase. USD-backed stablecoins are now thriving after Thursday’s crypto market crash. The market cap of Tether’s USDT has surpassed the $5 billion mark.
Tether’s transparency page indicates that the USDT has an overall market capitalization of $5.12 billion. Going by the reports given by the Whale Alert on twitter, it will appear that Tether minted $500 million in USDT just before March 12. Tether minted $115 million in USDT days after. Tether’s market cap stands at $4.6 billion. The digital assets chart do not indicate the coin’s overall market cap and supply has changed since last week.
Tether’s Controversy is Still Heated
Unlike BTC, the USDT token can be minted at any point as long as the network has enough collateral for this purpose. This in essence means that Tether makes and destroys USDT tokens to adjust its overall supply. This procedure has in turn maintained parity in the USD. It makes it difficult to determine whether Tether’s decision to mint large numbers of tokens is grounded in actual investor demand.
Furthermore, critics are not satisfied with Tether’s auditing practices. They have questioned whether or not the token has the sufficient collateral to mint tokens. Others believe that Tether can be used to monitor trade and market manipulation. Tether’s stablecoin has given crypto investors a successful way to avoid volatility. The USDT token has maintained the $1.00 price position for years now. Even this week’s crash did not impact the coin.
Other Stablecoins Are Thriving
Most of the other stablecoins are thriving as well despite Thursday’s market crash. CEO of Circle Jeremy Allaire noted that USDC is now experiencing an increase in demand. Its circulating supply has increased to $568 million. Just like Tether, it is backed by CENTRE, a central group that has recently minted and burned USDC tokens.
Meanwhile, Changpeng Zhao the CEO of Binance exchange said his network’s stablecoin, Binance USD, which was reportedly launched last September, has attained an overall market cap of $132 million.
Even though, all isn’t well with stablecoins, MakerDAO took implemented some measures to protect DAI, the Ethereum and the ERC-20 backed stablecoin, from the effects of Thursday’s crash. MakerDAO is now auctioning governance tokens as additional response. Since DAI is backed and managed by coin-holders, tokens can’t be burned or minted unilaterally. All decision are made based on a consensus.
We cannot tell if the crypto market will suffer further declines, or whether the demand for stablecoins will go higher if this happens to the coin.