Overnight Tether (USDT) had yet again flipped XRP for third place in market cap rankings. By morning, XRP had regained its spot.
While Tether is keeping its $1 dollar peg and its market cap continues to increase, currently standing at over $9 billion, XRP had dropped below $0.20 and has its market capitalization at $8.6 billion.
Although Tether moved above XRP today, the popular stablecoin remained above the bridge currency on Messari. This is because the crypto data tracking site believes, “XRP market cap may be $6.1 billion overstated.”
Falling Off the Peg
The largest stablecoin that is tied to the US dollar has recently fallen below par value for the longest period since bitcoin fell 50% in March.
It happened last Friday that USDT dropped below $1 up until Monday. This has been the result of people buying the dips on Bitcoin. The strong pressure for BTC, especially on futures markets in turn increased the demand for USDT that has its market cap doubling in about two months.
Bitcoin futures at premiums that indicate buy pressure also drives BTC/USD as a result of driving down USDT.
Tether is typically used as a substitute for US dollars on crypto exchanges, to buy other than as an investment.
So, big shifts in Tether’s demand can cause it to temporarily diverge from its peg. But another reason could be the slowdown in the issuance of new USDTs which has been off the charts for months and unrelated to BTC price movements.
Seeing Record Growth on Ethereum
But the ERC-20 USDT clearly dominates over other blockchain-based USDTs. More than 60% of all USDT is issued on the Ethereum network.
Meanwhile, Tethers’s adoption on Ethereum Network continues to see substantial growth. Currently, about 1850 new addresses holding USDT are recorded on Ethereum blockchain every hour, noted Glassnode.
This is a new all-time high and an increase of about 10 times since late January, this year.
Not just new addresses, but the number of USDT transfers is also at an ATH, “substantiating Tether's adoption on Ethereum.”
In the past 24 hours, 8100 transfers per hour were recorded, which is up more than 560% since its low in January.
“Tether transfer amounts on Ethereum are close to record highs, while Ethereum gas usage has also risen close to record highs and network utilization is close to 100%,” noted Denis Vinokourov of Bequant.