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Tether's USDT opened the year at a market cap of $66.2 billion, but has grown 22% to $81 billion. Circle's USDC has moved the opposite way, losing 21% of its market cap. USDT's share of the stablecoin space is up to 61.5%, its highest mark in two years. The collapse of TerraUSD in May 2022 and shutdown of BinanceUSD (BUSD) in February have increased concentration in the stablecoin market. USDC is struggling amid regulatory concerns in the United States and fallout from banking chaos, when Circle revealed it had 8.25% of its USDC reserves in Silicon Valley Bank. Meanwhile, concerns persist exist around USDT over its underlying reserves.

Tether launches USDT on TON Network, Telegram Wallet Tether's US dollar-pegged USDT and gold-pegged XAUT tokens have launched on The Open Network (TON), facilitating peer-to-peer (P2P) cross-border payments via Telegram's Wallet app among over 900 million global users. TON is a blockchain network that Telegram started to develop in 2018, but they open-sourced it in 2020 after the U.S. Securities and Exchange Commission (SEC) charged the firm with violating federal securities laws.

The Tether (USDT) premium is going up because after the PBoC ICO/exchange ban, the most convenient way to buy cryptos in China, is to buy stable coins like USDT first using OTC, and then trade it into any cryptos on exchanges.

Chinese cryptocurrency exchanges facilitate 60% of all stablecoin tether trading globally to Diar. Chinese exchanges in 2019 thus far account for over $10 billion in USDT trading. The US accounts for only $450 million of USDT traded.

All eyes have been on bitcoin recently as markets move into a consolidation phase following a flash crash last Thursday. What may have gone unnoticed is the issuance of more USDT as Tether market capitalization continues to crank higher.

Tether has created USD $180 million of its USDT stablecoin for a so-called "inventory replenishment" on March 17-18. Such a step could add further dynamics to an already extremely volatile Bitcoin market.

"What if Tether announced tomorrow that they don't want to enforce convertibility anymore, and oh by the way, "we don't really have a 1-to-1 reserve pool"? The company could keep issuing USDT as it sees fit, feeding the marketplace with enough liquidity to "keep it going". If indeed all USDT holders consider they have good reasons to hold Tether, because it helps them trade, there's is really no reason for them to dispose of it. A "Nixon shock" whereby Tether would announce it will not enforce the 1-to-1 parity anymore could be followed by a new rule of floating exchange rate. Would there be a fundamental problem with that?"

Regulators have waited too long to act on so-called stablecoins, to the point where exposure to schemes like that being run using Tether has infected the entire digital asset industry-and even beyond it. This is thanks to a network of exchanges which surround and rely on Tether and who perform a vital role in Tether's ability to mint new USDT and get them to market, all while maintaining a paper-thin illusion that the so-called stablecoins are backed by anything at all. In return, the exchanges get to sell the apparently value-less USDT in exchange for BTC."

The market capitalization of Tether (USDT) stablecoin has crossed the $50 billion mark, with the supply on Tron's blockchain ($26 billion) exceeding that on Ethereum's ($24.4 billion), because ransaction fees are lower, and confirmation times faster on Tron. Most of the Tron-based Tether's supply is on the lightly-regulated Binance, Huobi, and OKEx platforms. USDT remains the largest stablecoin by market capitalization, with about 66% market share, followed by USDC (17%) and BUSD (9%).

Tether is now one of the biggest money market funds in the world, holding more commercial paper than companies like Amazon and Google. According to JP Morgan analysts, although Tether might prefer the simpler solution of holding their USDT reserves with US banks, they have been pushed into a corner because of their limited access to such banks caused by their reputation for shady behavior, including, in the past, misrepresenting the sufficiency and quality of those USDT reserves. The kind of big banks that could accommodate a material portion of these reserves, including JP Morgan themselves, would likely steer clear of Tether due to reputational risk concerns.

A Tether confidence crisis would likely result in a black swan event and a re-shuffling of the market. While there's a chance that large players would counteract the crisis by buying back large amounts of USDT to restore the peg, or by successfully reassuring the market that all USDT can be redeemed at par, there's no way to be sure that this will happen, unless you put a whole lot of trust in Tether and its affiliates.

USDT issuance has begun to stagnate while the circulating supply of USDC continues. There has also been an increase in USDC deposited onto exchanges while the amount of USDT has declined. This is significant because Tether printing has historically been the impetus for major market moves, but its continued legal challenges and questions regarding assets held in reserve have made holding the token more of a liability as regulators increasingly crackdown on the cryptocurrency market.

Strike CEO Jack Mallers revealed that the firm would be integrating with the top five banks and two biggest cashpoint distributors in El Salvador. He said the cashpoint stores would enable people to exchange cash for balances on a mobile app like Strike and vice versa. The integrations would remove the need for USDT because Strike would be able to hold customers' balances at the banks. It would also give them more places to cash out those balances for fiat currencies. The original plan was to hold recipient funds in USDT due to Strike's limited banking options at the time.

After the PBoC ICO/exchange ban, the most convenient way to buy cryptos in China, is to buy stable coins like USDT first using OTC, and then trade it into any cryptos you want in exchanges.

Bitfinex now allows its customers to borrow Bitcoin (BTC) collateralized by three major fiat currencies (USD, EUR and JPY) and Tether (USDT). They will also be able to borrow Ethereum (ETH) against USD the borrower holds on the platform. Customers will be able to obtain BTC loans of up to 80% of the value of their USD, USDT or EUR holdings, or up to 70% of the value of their JPY holdings. Customers using the platform to borrow ETH will be able to get up to 80% of the value of their USD holdings. At launch, the annual percentage rate on BTC loans was 4.16%, and 1.14% on ETH loans.

USDT-settled futures contracts are easier to manage because the returns are linear and unaffected by strong BTC price moves. For those willing to short the futures contracts, there is no need to buy BTC at any time, but there are costs involved to keep open positions.

Stablecoin transfer patterns show that different stablecoins are potentially being used for different purposes, and are favored in different parts of the world. USDT-ETH transfers are concentrated during Asian and European market hours. USDC transfers are also clustered during Asian market hours, but not as densely packed as USDT-ETH. PAX transfers are more dispersed, which could signal that it is being used for non-institutional purposes. And DAI transfers mostly occur during U.S. hours.

Bitcoin miners need cash to pay their electricity bills. They could sell their rewards on exchanges which someone would have to buy, to prevent BTC from crashing. Tether and Bitfinex have real money from those who trade on its exchange, but why would they buy miners' BTC, when they can loan them the money instead? And if a miner defaults, it's not Tether the company that takes the hit, but USDT holders. Maybe that's the real reason why Tether/Bitfinex don't want an audit. Not because USDTs aren't backed, but because they're backed by miners' BTC. And because Tether controls the miners, they also control Bitcoin.

Crypto-asset exchange Bitfinex has launched tether (USDT)-settled perpetual contracts that track two European equity market indices (STOXX Europe 50 and Germany 30). Each contract offers up to 100x leverage and will be settled in stablecoin tether (USDT). A perpetual contract is similar to a traditional futures contract, but has no expiry and mimics a margin-based spot market. The perpetual contracts will be open for trading 24/7, unlike equity exchanges which are open for business for a limited number of hours, five days a week.

On 19 May, Binance customers using leverage found positions automatically liquidated as the crypto price drop wiped out all the collateral in their margin accounts before they could transfer extra funds onto the exchanges. This blog post examines another side of the story - the actual value of Binance's insurance fund and its ability to meet the potential pay-outs on 19 May, had the platform not been closed. I no longer believe the figures that Binance shows on its website for its insurance funds, nor their liquidation reports, and I maintain that a figure of only 3 million USDT for the BTC/ETH insurance fund pay-out on May 19 is grossly inconsistent with the actual number of liquidations on BTC and ETH products on that day. In fact, if the futures platform had not closed, I believe that Binance would have had to subsidise its insurance fund by a billion USDT or more.