Tethers’s (USDT) inherent link to the US dollar has helped the cryptocurrency to surpass market capitalization at the $40bn threshold on Wednesday.
The information, revealed by CoinGecko, exemplifies the token's staying power despite early-day qualms that USDT was steering away from the decentralization maxim introduced by Bitcoin.
Yet, with cryptocurrencies experiencing a bullish run thanks to the growing interest in Bitcoin, USDT is now the fourth-largest digital currency.
The data revealed that Tether had grown by a factor of ten in the past 12 months alone, benefiting from both a stable FIAT currency as well as the latest interest in digital assets. In comparison, Tether's market cap in March 2020 was only $4bn.
Because of its status, USDT is now used as the quote currency on several exchanges, including Bitfinex. USDT simply reflects the demand for cryptocurrencies and despite its “lack of decentralization” it's one of the most trusted tokens on the market, as its stability is a quality that retail and institutional investors find appealing.
Tether did face some regulatory scrutiny in the past, arguing that it was not actually pegged to the movement of the US dollar completely, but these rumors were examined by law enforcement and found unsubstantiated.