Tether Stablecoin: Can the Crypto Market Live Without It?

There is perhaps no other crypto asset more subject to scrutiny and accusations of impropriety than the Tether stablecoin.

Audit historyThe main accusation leveled at Tether is that it does not have the United States dollars backing the outstanding number of Tether tokens on the market.

The judge presiding over the case claimed that Tether essentially undermined the entire validity of the stablecoin by the admission that it no longer maintains its 1:1 peg.

Resilience of TetherDespite the countless issues with Tether and the apparent advantages that its competitors can boast, the business still dominates the stablecoin market.

The most recent data from Stablecoins War, a stablecoin data aggregation site, shows that Tether accounts for 97.5% of all stablecoin volume and 81.1% of the entire stablecoin market cap.

Virtually all of Tether's competitors emerged in 2018, by which point Tether had already sunken its teeth into the market.

Tether is still the most attractive stablecoin for larger players, who do not require regulatory compliance or who are not worried about Tether's other issues.

Crypto and global macro trader Alex Krüger told Cointelegraph that "Tether continues to dominate the stablecoin market due to demand from Asia.".

It is quite possible that Hong Kong nationals are, in part, driving Tether volumes, as the stablecoin presents a way to purchase crypto assets without going through Know Your Customer-compliant, fiat-to-crypto exchanges or over-the-counter desks.

"We do not think USDT represents a systemic risk to the crypto-asset space in the long term. Let's not forget that the rally we've seen in Bitcoin accelerated around late April, precisely when the market was concerned about the sustainability of USDT as an asset class. The same thing happened in October when Bitcoin shot up by more than 10% intraday on fears that things are not as they seem when it comes to the Tether stablecoin. The bottom line here is that the market has already spoken on this issue: It's telling us that, even when in doubt about the sustainability of USDT, the markets are liquid enough to absorb that capital flight."