Tether (USDT), the world’s largest stablecoin, achieved a groundbreaking milestone by surpassing its previous all-time high market cap of $83.2 billion, a record set back in May 2022.
This remarkable feat further cements Tether’s unrivaled dominance in the rapidly expanding stablecoin market, which currently totals an astonishing $130 billion, with USDT’s market cap surpassing the combined value of its closest competitors.
USDT Breaks 2022 Market Cap ATH
According to a blog post by Tether, the USDT stablecoin had an outstanding performance in Q1 2023 with a net profit of $1.48 billion.
“Today’s numbers demonstrate that people want access to financial freedom, and when given that access, they will make use of it. Tether tokens offer a safe harbor for the unbanked and allow people in emerging markets to keep their buying power, even when their national currency is being devalued,” said Tether’s CTO Paolo Ardoino.
The company has roughly 85% of its investments in cash, cash equivalents, and short-term deposits. Tether claims USDT has approximately 2.5 billion in excess reserves on top of the 100% minimum reserves and implements a 20% increase in token supply quarter over quarter.
“Between our battle-tested resilience in the face of market volatility and our industry-leading transparency practices, Tether has proven that it can be trusted, and customers are responding in kind. We are eager to continue maintaining our laser focus on emerging markets and will not waver in our efforts to expand access to financial freedom globally,” Ardoino added.
Other Stablecoins Struggle
USDT’s new feat comes as other stablecoins struggle to retain their market shares due to regulatory issues and unfavorable economic conditions.
While sharing the Tether update on Twitter, Changpeng Zhao (CZ), the CEO and founder of major crypto exchange Binance, noted that USDT saw significant growth after regulators capped Binance USD (BUSD).
Recall that the New York State Department of Financial Services (NYDFS) ordered stablecoin issuer Paxos to stop minting BUSD over alleged securities law violations in February. The stablecoin saw heavy outflows as investors reacted to the regulatory crackdown, and the asset lost its market cap of $23 billion. BUSD had a market cap of $5.1 billion at writing time, according to data from CoinMarketCap.
Besides BUSD, Circe-issued USD Coin (USDC), the second-largest stablecoin by market cap, also saw significant outflows in March as investors panicked after roughly $3.3 billion of its reserves were stuck at the now-defunct Silicon Valley Bank (SVB).
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