- USDT hits new market cap milestone.
- Willy Woo praises USDT for supporting the industry.
- Tether’s past continues to haunt it in the eyes of some.
Tether’s USDT has been under a cloud of suspicion for many years, with critics warning about the lack of transparency around reserves backing the stablecoin. Despite ongoing accusations, USDT has maintained its position as the leading stablecoin, much to the bewilderment of critics. As the crypto market is poised to explode higher, analyst Willy Woo praises the divisive stablecoin.
Woo Acknowledges USDT’s Importance
While acknowledging USDT’s past transgressions, Woo praised how USDT has effectively propped up the broader crypto industry by providing reliable on and off-ramping. The popular analyst congratulated USDT on achieving its $100 billion market cap milestone, solidifying its position as the de facto stablecoin of the cryptocurrency economy.
USDT’s market cap has been on an upward trajectory since Q4 2023, climbing from around $83 billion to its current $100.5 billion valuation. This growth has largely mirrored the wider price recovery in the crypto market over the same period. Conversely, USDT’s market cap plunged in November 2022 as the fallout from FTX’s collapse triggered widespread capital outflows and risk-off sentiment.
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The positive correlation between USDT’s valuation and market sentiment underscores stablecoin’s pivotal role in the crypto ecosystem. Despite that, some critics believe a leopard cannot change its spots.
NYAG Lays Smackdown on Tether
USDT criticisms came to a head in February 2021 when a New York Attorney General investigation found that Tether did not hold sufficient reserves to back the circulating supply of stablecoin tokens, contradicting Tether’s claims of 1:1 backing.
The probe also revealed that sister company Bitfinex had misled the public about major liquidity issues from an $850 million undisclosed loss related to payment processor Crypto Capital Corp.
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Bitfinex and Tether were banned from servicing New York residents and slapped with an $18.5 million penalty. Crucially, Tether was mandated to provide regular public disclosures on its reserves backing USDT.
To its credit, Tether has complied with the mandatory reserve disclosure terms, posting assurance reports from third-party auditors detailing the composition of its reserves. It has also moved to improve the quality of its reserves, such as cutting commercial paper holdings in favor of more secure assets such as US Treasuries.
On the Flipside
- Rival stablecoin USDC recently dropped support for the Tron blockchain, citing generic compliance reasons. This highlights the precarious position of stablecoin issuers with authorities.
- There is an ongoing debate around the “best” stablecoins, with IOG CEO Charles Hoskinson dismissing asset-backed stablecoins, such as USDT, as a threat to decentralization.
Why This Matters
As a respected figure in the Bitcoin community, Woo’s praise of USDT carries weight. However, there remains a hardcore group who cannot overlook USDT’s past transgressions, leading to a situation where the stablecoin’s $100 billion milestone is met with celebration and lingering skepticism.
Read more about Tether working with law enforcement to stamp out criminality here:
Tether Blacklists Multiple Addresses Holding $21.2M USDT
Bitcoin bounces back from major drawdown after Jim Cramer mocks investors. Read more here:
