Tether is about as controversial as it gets when it comes to the crypto space. But the negative stigma over the last year has begun to shed.
But there are a few facts about the stablecoin that many crypto investors may not know, and should take note of.
Expanding Use Case, Surging Demand Behind Rapid USDT Supply Growth
While Bitcoin is the undisputed king of cryptocurrencies, Tether is by far the most dominant stablecoin in the space.
It now ranks only behind Bitcoin and Ethereum, overtaking Ripple’s XRP for the third spot.
Making its way into the top three was cemented by its ever-growing market cap and supply.
Related Reading | It’s Official: Tether Flippens XRP After Recent Crypto Crash
Almost as fast as the Fed has been printing new dollars, the stablecoin’s parent company has been flooding the market with new USDT.
Tether’s supply is now topping $9 million and counting. Other stablecoins are also rapidly growing in supply due to the demand.
Stablecoins initially were used primarily as a safe haven crypto asset during drawdowns to prevent capital loss. But as the market grows these coins are now used in DeFi, as a store of wealth, or to move a stable USD equivalent quickly and for a low cost.
Tether Freezes Over $46 Million In Stablecoins, Why Crypto Investors Should Care
But not all is positive in Tether’s world for those that store their funds in the stablecoin.
According to Eric Wall, CIO of Arcane Assets, there’s been $5.5 million in total USDT frozen during 2020.
Correction: Actually there's 4 of the 22 that had active USDT balances when they were frozen, not 3. This makes the total frozen $5.5m. This account here that I missed is actually the second largest USDT freeze in Tether history:https://t.co/B0mfRYA1a2
— Eric Wall | OP_😺 (@ercwl) July 9, 2020
The sum was spread across 22 separate Tether accounts on Ethereum. Four accounts held the majority of the USDT frozen.
In a detailed Twitter thread, Wall explains how he used Etherscan to explore Ethereum’s blockchain and find the frozen USDT.
USDT exists on the Ethereum blockchain, along with Omni-layer Bitcoin, Tron, and more.
Tether apparently holds the power to freeze the asset on many of these protocols.
Related Reading | How Tether On Ethereum Is Rapidly Becoming The Cryptocurrency Of Choice
Wall says that most of the frozen funds were done as a precaution, were potentially associated with a Ponzi scheme, or to protect users from errors.
In total over the years over $46 million in USDT frozen by Tether.
Bitcoin was the first-ever cryptocurrency and is both a beauty and a beast. It empowers users to be your own bank, but with that power comes great responsibility.
No one can stop transactions, which is both a pro and a con. Imposing governments can’t do anything to interfere, but it also means sending your funds to the wrong address will leave you out of luck.
With Tether, you potentially get the benefit of being able to freeze transactions and get your funds back, but in the wrong hands or for the wrong reasons, funds could get frozen, and then what?
The goal of crypto was to give control back to individuals. Tether, although it may be growing in use case, remains a unique risk for crypto investors parking their capital in the stablecoin.
