Tether Stablecoin Becomes Fifth Cryptocurrency By Market Cap
The Tether (USDT) stablecoin became fifth in the cryptocurrencies rating by capitalization. At the same time, many altcoins lost in price due to the market downtrend that has been continuing since the beginning of 2018. For example, Litecoin (LTC), one of the most popular cryptocurrencies, took the ninth position, acccording to CoinMarketCap.
The record high of LTC price amounting to $350 was recorded at the end of 2017. At the beginning of 2018, Charlie Lee, the project founder, announced the sale of his stake in Litecoin to “avoid conflicts of interest”. The LTC price collapsed after this statement. Lee also warned users that the cryptocurrency price could drop to $20. As of December 7, its cost is $25.5.
The Tether stablecoin received mixed reviews throughout the year 2018, causing a number of disputes and suspicions. The crypto community cast doubts on the developers' statements regarding the amount of funds in US dollars to which the cryptocurrency is pegged. The creators of Tether were also accused of manipulating the market through USDT during the downtrend.
“Tether has been often criticized for its lack of transparency and its possible role in some market manipulation. However, if we think of Tether as the USD ledger of Bitfinex, they are not less transparent than other exchanges, their problem is indeed that since all the USDT transactions are visible on the blockchain, people can see the flow of money and try to connect it with the Bitcoin market fluctuations. So, the very same market manipulations that people accuse Bitfinex of doing through Tether, may happen on other exchanges as well, but we just can’t see them because they use a private ledger instead of a blockchain. Ironically, the problem with Tether is that they are being too transparent on the ledger side, while keeping the company’s structure more obfuscated as it is part of their strategy to achieve regulatory arbitrage”, — Federico Tenga, co-founder of the Chainside project, told Blockspoint.
He added that the situation led to a lot of FUD in the past aimed at making the peg with USD break, which worked for a while until some OTC traders that are able to redeem the USD from USDT managed to exploit the arbitrage window, making a profit while bringing the price back to the peg value.
As previously reported, Tether launched the identification of new customers.