FameEX Hot Topics | Tether's supply hits $80 billion, highest since May 2022

Tether's circulating market capitalization has reached $80 billion for the first time since May 2022, with a gain of $15 billion so far in 2023. This comes as USD Coin and Binance USD face market capitalization slips due to their exposure to now-collapsed Silicon Valley Bank and additional exposure to Silvergate Bank respectively. Meanwhile, New York regulators ordered Paxos to shut down BUSD issuance, leading to a decrease in its market capitalization as well. Tether has assured traders that it has no exposure to insolvent U.S. banks, making it a non-U.S. firm of choice among investors. Tether's circulating supply growth has coincided with a drop in its supply across exchanges. Its balance on exchanges has dropped 28% year-to-date to 12.88 billion USDT, while the aggregated stablecoin balance across exchanges has dropped by 41% YTD to $22.31 billion, according to Glassnode.

Despite the growth in Tether's supply, the company has faced scrutiny over its reserve assets and lack of proper audits for years, raising concerns among some critics. Tether claims to have a 1:1 ratio of U.S. dollars held in reserve for every Tether issued, but the company has been criticized for not providing regular, independent audits to support its claims. Additionally, Tether has been linked to controversies such as the 2018 Bitfinex scandal, where Bitfinex and Tether were accused of creating fake USDT to artificially inflate Bitcoin prices.

The rise in Tether's supply and its popularity among traders may signal a shift away from other stablecoins that have faced recent challenges. However, it remains to be seen whether Tether can continue to maintain the trust and confidence of the crypto community amid ongoing scrutiny and controversies. As the cryptocurrency market evolves, stablecoins such as Tether will remain important for traders and investors seeking stability and liquidity in their transactions.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.