USDT Volumes Skyrocketing, Tether Stablecoin FUD Over?

Tether (USDT) trade volumes continue to ride high with trends similar to the cryptocurrency market highs of late 2017. The performance of this stablecoin certainly provides an interesting indicator of the overall health of coin markets.

Notably, USDT has had its fair share of controversy. The coin essentially claims that it has back up in national currencies like the USD and Euros. As such, Tether management designed the coin to be worth a dollar for every tether token issued. However, Tether’s lawyer recently admitted that the backup is only 74 percent in cash and other securities.

This admission saw prices slide by about 1.45 percent because it put the claim of 100 percent backup claim on their website to waste. Moreover, USDT management has made it clear that no token holder merits a redeemable value of $1 as a contractual right.

This provision is perhaps to skirt around potential legal claims because of the inconsistency in backup.  However, markets seem to be on the up again with the uptick in trade volumes.

USDT and Bitcoin

Bitcoin prices are seemingly on a roll again. This puts the coin in a trajectory for a bull market which is positive news for investors. As such, Bitcoin trade volumes are reaching record highs once again. This is because exchanges like Binance currently report a daily volume for BTC/USDT pairs at about $281 million on CoinMarketCap. This means that both Bitcoin and USDT have increasing investor confidence. The stablecoin tag is certainly a great marketing tool for USDT.

Bitcoin has also had its fair share of rough times. In recent weeks, the Blockchain transparency institute claimed that up to 65 percent of Bitcoin trade on exchanges could be “fabricated”. This is apparently because a number of exchanges use bots to conduct multiple two-way trades each day. The result is an impressive trade volume which is not an accurate reflection of investor activity.

However, this claim has not caused the wave it should have. Investor confidence seems to be on the up as trade volumes show. The performance of USDT/BTC pairs is reminiscent of the previous bull market.

Is Tether Out of The Woods Yet?

Tether remains an attractive portfolio because of its apparent stability. However, this could begin to undergo some strain if regulatory oversight continues to be an issue.

The most notable problem is an inquiry into the exchange by the New York State attorney General. The AG accused Tether of concealing a BitFinex and Tether of working together to conceal a loss of $850 Million by the former exchange.

Moreover, there are concerns as to security and liquidity.  Tether has also failed to furnish proof of its ability to prove that it has a dollar for every token it issues. This presents problems for the company which promises to withstand an external audit is subjected to one. To date, Tether still struggles to stand up to its reputation as a stablecoin. The transparency and liquidity questions are things the coin management will have to address better moving forward.

Nonetheless, investors seem to be more optimistic. If the trade volumes are anything to go by, the FUD on tether and BTC seem to be waning. Therefore, USDT could be in for some good times with Bitcoin prices on the move again.

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