Tether (USDT) Attempts Damage Control in Tense Race Against USDC
Tether (USDT) made a significant announcement amidst the ongoing fierce competition between the two largest stablecoins. Market capitalization for USDT has risen above $65.8 billion as of this writing.
Reduce its Commercial Paper Holdings
Tether issued a statement clarifying its commercial paper holdings, which have been incorrectly exaggerated in the market. There was a note saying the company doesn’t invest in Chinese business documents. Their current risk is estimated at $3.7 billion. However, the $30 billion in July 2021 has been lowered.
By the end of August 2022, Tether says it will have reduced its cap to $200 million. While its ultimate goal is to eliminate it entirely by November 1, 2022, that date is just a target.
A diversified portfolio with little concentration in any one asset or issuer was cited as one way in which Tether protects its investors’ capital. With an eye toward being the go-to stablecoin, the community has made a commitment through the choice to cut back on commercial papers.
The press release brought up the problem of incorrect information being shared in the cryptocurrency sector even further. Tether has deemed it the worst danger and linked it to fraud, hacking, and even cyberattacks. Because of the impact that these issues have on the company’s image and the digital asset market as a whole.
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Will USDT Lose its Status as a “Stablecoin” ?
However, USDT is losing ground to USDC as the leading stablecoin in the cryptocurrency industry. This research claims that by the end of the month of October, USD Coin will have become the most popular stablecoin, surpassing Tether. The current market capitalization of the USDC is more than $55.23 billion.
The analysis noted a diminishing share of the market for USDT. Falling below 50% in November of the prior year. The stablecoin has not been able to regain its value since then. Though the recent decline has made things even more difficult.
The value of Tether dropped from $78.4 billion to $66.3 billion. Alternatively, USDC’s market cap has increased by 70% annually. There was a dramatic increase from $42.2 billion in 2020 to $55 billion in 2022.