Tether, the notoriously famous crypto coin, is, unfortunately, paving its way into the depths of the digital currency niche by evolving as a strong medium for the trading of goods and services. The virtual currency has been at the center of focus for all the bad reasons in recent times. Many researchers accused Tether of being employed as a tool for manipulation of prices of many reputed digital coins.
Despite all these allegations, the position of Tether in the crypto domain appears to be quite strong in comparison to many other digital coins. The coin accounts for nearly 30% of trading volume at one of the largest crypto payment processors, CoinPayments.net. At B2BinPay, the controversial coin, Tether, has shown a surge of about 20% in the transaction volume involving both customers and merchants.
The primary reason for the success of Tether can be attributed to the fact that it is a stablecoin. The primary aim of stablecoins is that they help in avoiding price variations while keeping intact a one-to-one ratio with the native dollar by maintaining a reserve for it. Cryptwerk, which works as a store directory, has listed 265 firms that accept Tether as a mode of payment for transactions.
Sean Mackay, operations chief at CoinPayments.net stated that
Merchants used to accept Bitcoin, Ethereum, Ripple and convert it into Tether in order to hedge against the volatility. Now we are seeing the payments just being done directly in Tether.
As per the recent stats, the success of Tether is being held responsible for the plummeting figures of leading crypto coins, Bitcoin and Ether. At CoinPayments.net, Bitcoin has seen a drastic fall of nearly 60% in the payment settlement volume. Interestingly, Tether stands a place ahead of Ether in the ranking, which grabs the third spot on the platform.
The popularity of Tether can also be attributed to its widescale acceptance in the marketspace. The merchants who face issues in credit-card processing services or have to pay heavy processing charges often resolve to Tether as a medium of exchange. According to Michael Chrzan, the co-owner of Green Earth Robotics Inc. has revealed that Bitcoin, Ether, and Tether are the most widely used crypto payment coins on the platform.
Tether, it’s started catching up. Since their community is growing, we believe it will expand in time. When the community is growing, they start using the coin,
CoinMarketCap.com has revealed that the market capitalization of Tether has risen to $4.12 billion from $2 billion in a year’s span.
Recently, Tether’s parent companies were being sued by the Ney York Attorney General for concealing the loss of more than $850 million in corporate funds. Though, Tether has refuted the allegations. Also, it was clarified through a court filing this year that only 74% and not 100%, as it was earlier claimed by the firm, of the Tether assets are secured by cash and short-term securities.
John Griffin, a renowned finance professor at the University of Texas, blamed Tether-backed manipulation for Bitcoin’s fall in 2017.
Despite all this, Tether has managed to maintain its position in the niche. Sean Mackay concluded, saying that “The fact that they have so many users just goes to show even if there’s nothing backing it, people are still using it.”