USDT Tether treated $18.2 trillion In 2022 transactions, visa Mastercard, according to a January 14 tweet.
In comparison, the value of transactions processed by Mastercard and Visa is $14.1 trillion and $7.7 trillion, Respectively. Tether’s high trading volume is a testament to the significant growth of stablecoins in recent years.
Despite the challenges facing the cryptocurrency industry, stablecoins seem to be thriving. In fact, stablecoin adoption is growing in countries where the current economic climate puts their fiat currencies at a disadvantage.
Tether: Overtaking Visa, 2022 will be difficult
As expected, Tether USDT far outperforms traditional payment giants visa As confirmed in the following tweet, trading volumes are:
Payment volume in 2022 pic.twitter.com/k87FrknKr4
— Tether (@Tether_to) January 14, 2023
despite this, tether Indeed, despite increased stablecoin adoption in 2022, over the past year Tether has seen growing concerns about reserves and solvency beyond 2022. collapse of Terra UST May and virtual currency exchanges FTX in November.
So at the height of Terra’s FUD crash, the stablecoin temporarily lost its peg to the US dollar.During this period, stablecoin issuers will be $10 billion redemption.
Additionally, BeinCrypto later reported that several traditional financial institutions have taken short positions in USDT due to speculation about their financial health.
In fact, several hedge funds have bet on Tether throughout 2022.These include Fir Tree Capital Management, Viceroy Research, Valiant, others. In particular, hedge fund Fir Tree $4 billion in assets Under control, we took a short position against Tether.
At the time, the hedge fund even indicated that it was willing to create a separate fund to short Tether if there was enough interest from customers. Again, Viceroy Research is also betting on his Tether failure.
Viceroy is a short seller who previously bet against German company Wirecard AG before it went bankrupt. According to founding partners, Fraser Pellingthere is a problem with the tether.
Tether Beats Visa, But Its Market Cap Has Decreased
USDT is still the dominant stablecoin in the cryptocurrency market, but it also has rivals such as: USDC and BUSD has recorded a victory in 2022.For context, the market cap of Tether is $83.13 billion to the low price of $65.31 billion during the review period.
On the other hand, the USDC market capitalization is $56 billion before it fades. In fact, during this period the coin base We encouraged users to convert their USDT holdings to USDC.
Recently, crypto dot com has removed USDT for Canadian users, citing regulatory compliance measures. glass node According to data, USDC remittance volume will be nearly five times that of USDT by the end of 2022. USDC adoption is growing as investors believe he is a safer option than USDT.
USDC’s assets are backed by cash or short-term US Treasury bills and managed by Grant Thornton, a global accounting firm. Tether, on the other hand, is not very active regarding reserves and audits.
An issue that has led some members of the cryptocurrency community to question Tether’s 2022 trading volume figures. Some believe the metric is for flushing transactions, while others ask stablecoin issuers to do so. Publish reserves.
A blatant clash between Tether and hedge funds
As expected, over the past year, everyone from on-chain investigators to crypto executives have questioned Tether’s opaque financials. Regulators have also owed millions of people for misleading financial statements.
Meanwhile, the bankruptcy of algorithmic stablecoin Terra UST in May and FTX in November has further increased the pressure on USDT, which many now take into account. It may then fail.
However, the company claims it is fine and will continue to honor the redemption.
As for hedge funds betting on it, a company spokesperson said it was involved in a clever scheme to raise money from less informed people through leverage. misinformation The ultimate goal is to collect administrative costs.
However, the failure of the stablecoin leader would be disastrous for the entire cryptocurrency industry given its market position. is the largest stablecoin By market capitalization and one of the most widely used assets.
