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Tag: Tether (USDT)

  • Tether's (USDT) Market Cap Peaks at $90 Billion Amid Renewed Confidence

    Tether's (USDT) Market Cap Peaks at $90 Billion Amid Renewed Confidence

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    Tether (USDT) – the largest stablecoin globally, has experienced continuous growth in its market capitalization, reaching an all-time high of $90 billion on December 6th before retreating слигхтлъ to $89.9 billion. This surge suggests a renewed trust in the crypto market despite facing regulatory hostilities.

    Over the last month, the market cap has increased by around 6%, bringing the year-to-date growth to over 35% from a modest $66.24 billion, demonstrating its capacity to navigate market volatility and restore investor faith.

    The growth also signified an improvement in liquidity in the market with an influx of additional capital into the ecosystem.

    State of Stablecoins

    Following major incidents such as the Luna collapse in June 2022 and the Silicon Valley Bank (SVB) crisis in March, there was a significant decrease in the overall supply of stablecoins, signaling a lack of confidence in the market.

    However, from October 2023 onwards, there has been a consistent increase in the total stablecoin supply, indicating a positive shift. This upward trajectory serves as an early indicator of enhanced on-chain liquidity, suggesting a scenario where more capital is ready for deployment, according to the latest CoinMetrics report.

    USDC – the widely used stablecoin in decentralized finance (DeFi) applications – experienced a notable portion of its supply residing in smart contracts, reaching a peak of over $20 billion in March 2022. However, throughout the year, this figure slashed by half from its peak of $14 billion in March to $7 billion by December 2023.

    In contrast, Tether (on Ethereum), primarily held in externally owned accounts (EOAs), has demonstrated a different trajectory. Its involvement in smart contracts has expanded, increasing from $4 billion at the beginning of the year to surpass $6 billion.

    The report also found that the number of addresses holding greater than $100k USDC has declined to 13k addresses, while those for USDT on Ethereum remain relatively stable.

    But USDT on the Tron network has a completely different story. Tether on Tron witnessed a steady growth in adoption, with nearly 40k addresses holding greater than $100k. Such a trend can be attributed to its cheaper transaction fees and potentially increasing use in developing economies across parts of Latin America, Africa, and Asia.

    Spot Trading Volume

    There has been a significant uptick in stablecoin spot trading volumes, highlighting their utility as a quote asset on both centralized and decentralized platforms. CoinMetrics found that USDT continues to dominate the trusted spot volumes, reaching $18.8 billion on November 15th.

    These volumes rank second only to those observed during significant market events such as the Terra, FTX, and SVB collapse.

    USDC volumes have also recently surged, reaching $2.5 billion in November – a record high in USDC trading volume.

    In contrast, the volumes for other stablecoins have declined, primarily due to the reduction in BUSD volumes, which Binance announced it would cease supporting this month.

    Overall, the upward trend in volume signifies a growing interest among traders and investors in gaining exposure to crypto assets with the potential for appreciation, particularly as the broader crypto markets are experiencing an upswing.

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    Chayanika Deka

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  • Tether's Bitcoin Strategy Pays Off Big: $1.1 Billion Profit Amid Price Surge

    Tether's Bitcoin Strategy Pays Off Big: $1.1 Billion Profit Amid Price Surge

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    In a week that saw Bitcoin surging to an impressive $42,000, Tether, the company behind the world’s largest stablecoin, witnessed a substantial increase in the value of its BTC holdings, resulting in a staggering unrealized profit of over $1 billion.

    Since May 2023, Tether has amassed 4,083 BTC.

    Tether’s Bitcoin Holdings Soar

    According to data compiled by crypto analyst EmberCN, Tether currently holds an impressive 57,576 BTC, equivalent to approximately $2.4 billion. The average purchase price per Bitcoin stands at $22,480, indicating an 85% increase in value. This essentially translated to a $1.1 billion unrealized profit since the acquisition of these assets.

    The primary driver behind Tether’s substantial unrealized profit is the recent surge in Bitcoin’s price. The flagship asset briefly crossed the $42,000 mark this week before settling at its current price of $41,700, marking a notable 13.1% increase in the past seven days.

    Tether’s Bitcoin holdings can be divided into two categories: firstly, 53,492 BTC were set aside before March of this year; secondly, a strategic move was made in May 2023, wherein Tether committed to allocating up to 15% of its net realized profits continually into Bitcoin.

    Despite the volatility concerns of Bitcoin, Tether views it as a resilient, long-term investment. This decision aligns with the stablecoin’s overarching strategy to expand its portfolio beyond conventional assets such as cash and cash equivalents.

    Tether had previously clarified that the aim is to keep the Bitcoin portfolio value well below the size of the company’s total excess reserves, which accounted for $2.48 billion at the end of the first quarter of 2023, while BTC holdings accounted for $1.5 billion.

    Tether’s Paolo Ardoino then stated,

    “The decision to invest in Bitcoin, the world’s first and largest cryptocurrency, is underpinned by its strength and potential as an investment asset. Bitcoin has continually proven its resilience and has emerged as a long-term store of value with substantial growth potential. Its limited supply, decentralized nature, and widespread adoption have positioned Bitcoin as a favored choice among institutional and retail investors alike.”

    Tapping the Bitcoin Mining Sector

    In addition to boosting its Bitcoin holdings, Tether also doubled down on plans to inject more funds into Bitcoin mining as part of its expansion plans.

    Last month, the firm announced a cash surplus exceeding $3 billion in its attestation report with plans to dedicate $500 million to Bitcoin mining activities within the next six months.

    This allocation will be directed toward establishing Tether’s Bitcoin mining facilities and investing in pre-existing BTC mining enterprises. This includes a recent provision of a $609 million debt financing facility to the European Bitcoin miner, Northern Data Group, as part of Tether’s strategic initiatives.

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    Chayanika Deka

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  • US Judge Dismisses Class Action Lawsuit Against Tether and Bitfinex

    US Judge Dismisses Class Action Lawsuit Against Tether and Bitfinex

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    A United States judge has concluded the dismissal of a class action lawsuit against stablecoin issuer Tether and its affiliate crypto exchange Bitfinex, two years after the plaintiff made a move against the firms.

    According to a blog post, Chief Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York denied Shawn Dolifka’s motion for leave to amend the class suit. Dolifka has now chosen not to appeal the judge’s decision.

    The Class Suit

    Dolifka filed a class suit against Tether in October 2021, accusing the company of misleading customers regarding the attributes of its stablecoin, USDT, and creating a scheme to induce users to purchase the crypto asset.

    With Matthew Anderson, Dolifka accused Tether of falsely representing USDT reserves, arguing that the company maintained cash reserves that were less than 4% of the tokens in circulation.

    The duo insisted that the reserves did not contain U.S. dollars and were mostly made up of assets like overcollateralized loans and other undisclosed commercial paper, and worse still, the firm had not undergone any professional audits despite promising transparency to its customers.

    In addition, the lawsuit alleged that USDT was not a stablecoin, as it was not backed 1:1 with the U.S. dollar, as Tether had claimed. The plaintiffs claimed Tether’s alleged misconduct qualified them to receive compensatory and statutory damages, prejudgment and post-judgment interest, and attorneys’ fees.

    “Meritless Claims”

    Tether called the lawsuit nonsense and copycat in response, stating that the plaintiffs and law firm were looking for a payout based on “meritless claims.” The company’s CEO, Paulo Ardoino, said the class suit would bite the dust like others.

    With Judge Taylor finalizing the dismissal of the lawsuit, Tether has reiterated its stance to never fall prey to “shameless litigation money grabs.”

    “Quite unlike Dolifka’s ill-advised decision to file the action in the first place, his decision to forego his appeal rights was the correct decision. His claims were entirely meritless, and no amount of further litigation would have resulted in Dolifka or his attorneys realizing anything monetarily or otherwise,” Tether added.

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    Mandy Williams

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  • Stablecoin Activity Takes Crown From DeFi in Q3: Report

    Stablecoin Activity Takes Crown From DeFi in Q3: Report

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    Stablecoins are often viewed as assets that pose systematic risks to the financial market. However, these pegged tokens have become the most popular category among investors amid adverse market conditions.

    QuickNode’s latest on-chain report revealed a notable surge in stablecoin activity across blockchain networks.

    Stablecoins saw a 45% growth in active addresses and a 41% increase in transactions between the first and third quarters. Contrastingly, DeFi experienced significant drops in daily active addresses and transactions. Moreover, these protocols went from having over 1 million daily average transactions in the first quarter to 786,000 in the third quarter.

    Stablecoin’s Growing Appeal to Investors

    It wasn’t until July that stablecoins solidified dominance in the market with transactions surpassing those of DeFi protocols on various blockchain networks, including Ethereum, Arbitrum, Polygon, Optimism, and more. In Q3 2023, stablecoins eclipsed other categories, boasting over 400,000 daily active addresses, making it the sole category to exhibit growth.

    QuickNode’s report shared with CryptoPotato,

    “Stablecoins are the dominant player in terms of daily active users. They have eclipsed even the likes of DeFi, which has been the traditional stronghold in previous years. The rise can be attributed to the inherent stability and value predictability that stablecoins offer, making them an attractive entry point for both new and seasoned users.”

    USDT continues to lead the stablecoin space in terms of market capitalization, active addresses, and transaction activity. It concluded Q3 with an average of 337,000 daily active addresses while its transactions averaged at 680,000 daily.

    Even as USDC maintains a lead over USDT in terms of volume for the third quarter, the analysis suggests that the gap has notably shrunk since Q1, primarily due to Silicon Valley Bank’s (SVB) collapse and USDC’s slight de-pegging of about $0.03.

    Meanwhile, USDC experienced a significant volume decline, with a 62% decrease from Q1 to Q3.

    Uniswap Thrives in Q3

    2023 hasn’t been kind to DeFi. The report found that Uniswap is the only DEX that has maintained stability since Q1 2023, despite a significant event when Silicon Valley Bank (SVB) collapsed. This collapse resulted in a substantial increase in the platform’s trading volume, primarily driven by a few large-volume transactions, rather than a surge in the number of transactions or active addresses.

    Notably, Uniswap is the only DEX that experienced a 15% growth in active addresses and a 33% increase in transaction count during Q3, diverging from the broader DeFi trend.

    Despite the continued dominance of DEXs within the DeFi subcategory, staking is gaining momentum, in yet another interesting trend.

    In Q3, the total staked Ether increased from 23.7 million to 27.2 million, with 37% of this attributed to Liquid Staking – a concept that resembles distributing IOU tokens in exchange for staked assets.

    Users depositing Ether in Lido DAO’s protocol receive stETH tokens, enabling them to participate in DeFi while earning ETH rewards. By the end of Q3, Lido held 32% of the staked ETH, with its value growing from $7.6 billion to $8.8 billion, marking a 16% increase.

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    Chayanika Deka

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  • Kraken To Suspend All USDT, WBTC Deposits In Canada

    Kraken To Suspend All USDT, WBTC Deposits In Canada

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    Crypto exchange Kraken has confirmed that it plans to close all trading, deposits, and withdrawals for Tether USD (USDT), Wrapped Bitcoin (WBTC), and other reserve-backed assets in Canada.

    The suspension follows a similar stablecoin clampdown at other Canadian exchanges, amid regulatory guidance pertaining to the legal standing of such tokens.

    No More Value-Pegged Tokens At Kraken

    According to an email received by CryptoPotato from Kraken on Friday, the firm is now “required” to suspend deposits, withdrawals, and trading in Canada for Tether (USDT), Dai (DAI), Wrapped Bitcoin (WBTC), Wrapped Ether (WETH), and Wrapped Axelar (WAXL).

    As of November 30 at 12:00 p.m. EST, deposits and trading for each coin will end. Withdrawals will end on December 4 at 11:00 a.m. EST, with such assets remaining on the platform to be converted into USD at the prevailing market rate on December 5.

    “If you hold balances in any of USDT, DAI, WBTC, WETH, or WAXL we encourage you to consider one of our supported trading pairs or to withdraw prior to November 30th,” wrote Kraken.

    All such assets are similar in that they are derivatives of other currencies and/or digital assets. USDT and WBTC, for example, are derivatives of the US dollar and Bitcoin, and are backed by centralized reserves comprised of cash and BTC respectively.

    Canada’s Stablecoin Crackdown

    Back in April, rival exchange Coinbase also announced its cancellation of support in Canada for stablecoins including USDT, RAI, and DAI, for failing to meet the company’s listing standards. The suspension took effect last month.

    Crypto.com announced a similar stablecoin halt in January, specifically citing instructions from the Ontario Securities Commission (OSC). For its part, Coinbase often emphasizes that its platform does not list securities.

    While market regulators in the United States continue to bicker about the legal status of stablecoin assets, the Canadian Securities Administrators (CSA) clarified in December that they view any value-pegged crypto assets as securities.

    The agency stressed at the time that crypto trading platforms are “prohibited from permitting Canadian clients to trade, or obtain exposure to, any crypto asset that is itself a security and/or a derivative.”

    Despite the fierce regulations, Coinbase has praised Canadian lawmakers for advancing recommendations that would recognize citizens’ right to self-custody, and the distinct nature of stablecoins from other cryptos.

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    Andrew Throuvalas

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  • This Swiss Company Wants to Use Excess Energy From Food Production to Mine Bitcoin

    This Swiss Company Wants to Use Excess Energy From Food Production to Mine Bitcoin

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    Gabbani, a hotel company based in Lugano, Switzerland, has unveiled an initiative to mine Bitcoin using excess energy from its food production facility. The new project is set to solidify Lugano’s status as the leading European blockchain hub.

    According to an official announcement by stablecoin issuing company Tether, Gabbani will install a Bitcoin mining system in its food production facility to harness excess energy as electricity costs in Europe continue to rise.

    Food Production Energy for Bitcoin Mining

    Besides utilizing excess energy from food production, Gabbani is also announcing the launch of “The Banettone,” a product that will support Lugano’s Plan B project. Plan B is a joint initiative created by Lugano and Tether to leverage Bitcoin technology as the foundation to modify the city’s financial structure.

    Gabbani’s food facility, which houses the production of Banettone and other products, recently underwent several upgrades, including the installation of a 100,000 KW solar system. Recent developments serve a dual purpose of increasing the company’s energy independence and sustainability and availing extra energy for Bitcoin mining operations.

    “This forward-thinking approach firmly positions Gabbani as a trailblazer in its field, potentially making it the first of its kind worldwide. This fusion of high-quality food production, rooted in a tradition dating back to Domenico’s grandfather in 1937, with cutting-edge technologies, underscores Gabbani’s commitment to ensuring a sustainable future and fostering growth,” Tether said.

    Lugano Embraces Bitcoin

    Lugano launched Plan B to accelerate the impact of blockchain and Bitcoin in all parts of daily living for its residents. The city intends to extend the novel technology to small transactions between local merchants and larger financial exchanges like tax payments.

    The Lugano Bitcoin initiative has motivated companies like ACME, which specializes in Bitcoin mining and renewable energy, to partner with Gabbani by contributing its expertise in research and development. The company has provided Gabbani with a Bitcoin mining system to ensure the new project’s success.

    Meanwhile, Lugano has become one of the leading European blockchain hubs after creating a long-term adoption blueprint for the novel technology. The city has recognized Bitcoin, Tether, and LVGA as legal tender, making them acceptable forms of payment for taxes and public services.

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    Mandy Williams

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