Tether has been riding a wave of success, hitting a new level of success in the cryptocurrency market. Over the past several months, the company’s market capitalization has skyrocketed, with the current market cap now sitting at an incredible level. Such success has been in stark contrast to many of its rivals, who have been grappling with redemptions and other withdrawal woes. In this article, we look at the reasons behind Tether’s success and its implications for the industry.
1) Tether Skyrockets as Rivals Struggle with Withdrawals
Tether Skyrockets as Rivals Struggle with Withdrawals
Recently, Tether, the most widely used stablecoin, has experienced a surge in demand as rival cryptocurrencies have suffered from various withdrawal issues. In March, Tether gained almost 8% in total market capitalization, out-performing Bitcoin in terms of growth.
It comes as a pair of high-profile competitors, USDC and BUSD, have been plagued by on-chain transaction fees and delays in processing withdrawals. Critics have noted that, compared to its competitors, Tether offers significantly faster and cheaper transactions, making it an attractive alternative for investors.
Key advantages of Tether include:
- Lower Fees: Tether users enjoy very low transaction fees compared to other stablecoins
- Faster Transactions:Tether transactions are much faster than those of its rivals
- Higher Supply:Tether’s total supply is much higher than that of its competitors, meaning investors have access to higher volumes of capital
This combination of benefits has led to an increase in demand for Tether, allowing it to stand out from the crowd in a typically volatile market. In spite of the cryptocurrency industry’s overall struggles in the first quarter of 2021, Tether has shown strong growth, proving its metal against its competitors.
2) Cryptocurrency Market Sees Fluctuations Amidst Redemptions
The cryptocurrency market has seen some significant fluctuations with the recent news of redemptions being granted to high profile investors. Investors in major cryptos such as Bitcoin, Ethereum and Ripple have been hit the hardest, with these coins all losing considerable value. When news began to spread of redemptions for the top investors, panic selling quickly followed.
Smaller investors have also been affected, with some exiting the market due to fears of further losses. This has resulted in some coins trading at level not seen in months, with some coins down as much as 50% from their peak. Despite this, some investors are still seeing this downturn as opportunistic, believing that this is only a short-term correction, and technologies such as blockchain still hold promise for future growth.
- Bitcoin down nearly 20%
- Ethereum down 30%
- Ripple down 25%
It’s clear the demand for Tether’s digital currency hasn’t slowed down despite its rivals’ stumble, signaling that Tether may have a competitive advantage over others. As the market reacts to the news, it looks like investors are turning to Tether as a reliable hedge against the volatility of the volatile cryptocurrency markets. Only time will tell what the future holds in store for Tether, but its market cap is showing no signs of slowing.