Crypto stablecoin Tether (USDT $1.00) has crossed an all-time high market capitalization of $100 billion, posting a 9% year-to-date growth and furthering the gap between its next-largest rival, USD Coin (USDC $1.00).

USDT momentarily hit its $100 billion milestone on March 4 as the market capitalization fluctuates based on the current price and circulating supply, according to data from CoinGecko.

It’s over $71 billion ahead in market cap compared to its closest stablecoin rival, USDC, issued by Circle, which has also seen its market cap grow this year.

Chart

Chart showing USDT market cap growth in the last seven days. Source: CoinGecko

On the other hand, Tether has yet to breach the $100 billion milestone on other data sources, such as CoinMarketCap.

Tether’s market cap places it around par with the British oil and gas titan BP and a little above the e-commerce giant Shopify.

Tether is a cryptocurrency pegged to the price of the United States dollar available on 14 blockchains and protocols, according to its website.

It’s the third-largest cryptocurrency by market capitalization behind Ether (ETH $3,503), and it has grown to play a key role as a blockchain-based option for crypto traders needing a stable asset.

Over the past month, the crypto market has sprung back to a market cap above $2 trillion, with Bitcoin (BTC $65,064) seeing a 50% price increase and notching two-year price highs.

The company that issues the token — also called Tether — claims to back each USDT token 1:1 with its independently audited reserves primarily made up of yield-bearing U.S. Treasury Bills (T-Bills) — a short-term loan given to the U.S. government.

In the fourth quarter of 2023, the company posted a record quarterly profit of $2.85 billion, $1 billion of which came from its T-Bills. Its fourth-quarter report disclosed T-Bills holdings of over $80 billion, and in the past, it claimed to be one of the world’s top buyers of U.S. government debt.

Chart

Tether’s Q4 2023 report also said it holds $2.8 billion worth of Bitcoin. Source: Tether

The quality of the assets backing USDT has been a cause of concern in the crypto space, and Tether has made efforts to reduce its exposure to some assets deemed higher risk.

Related: Stablecoins could boost dollar as global reserve currency: Fed governor

In late 2022, Tether pledged that by the end of 2023, it would stop lending out funds from its reserves.

Those plans never eventuated, with Tether having $4.8 billion of loans on its books at the end of 2023, although it’s about $1 billion less than it started the year with. It claims the loans are fully collateralized and promised to cut them to zero in 2024.

Over half of the USDT currently issued is on the Tron blockchain, which a January United Nations report said “has become a preferred choice” for Southeast Asia-based cyber fraud and money launders.

Tether has hit back at the report, claiming the UN failed to mention the company’s law enforcement collaboration and the token’s traceability.


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