Tether has slowly, but surely, worked its way to becoming the third-largest cryptocurrency the world has to offer. This would mean surpassing Ripple’s XRP, but that will be inevitable at the rate USDT is printing money, set to surpass the coin in a few days’ time at this rate.
Readying To Take Third Place From XRP
Throughout the past two months, Tether has been continuously printing new USDT, issuing a record amount as of late. To put it in perspective, Tether’s market capitalization stood at approximately $7 billion on the 19th of April, 2020. According to Tether’s own transparency numbers, however, this number has been increasing and now stands at an incredible $8,622,300,975. When you crunch the numbers, that’s approximately $40 million USDT printed out every day in the month of April, on average.
Tether’s growth has been astounding by any perspective and worrying by many more. The USD-based stablecoin seems poised to overthrow Ripple’s token, the XRP, for the position of third-largest cryptocurrency out there.
A Simple Matter Of Time
XRP itself is valued at approximately $8.7 billion at the time of writing. This means that Tether only needs to inject another $100 million into its system to definitively push it past the market capitalization of Ripple. With the sheer rate Tether has been printing money, this seems more like an inevitability set to happen within the week.
Within the past few days alone, Tether has printed out an incredible $500 million in USDT, so surpassing Ripple’s XRP could happen faster than anyone would expect.
Caution Highly Advised
However, not everything’s sunshine and roses for Tether. With the constant printing of new USDT, a coin supposedly backed 1:1 in value by the USD fiat, questions have started to rise. The fact of the matter is, it’s highly suspect to print such a large amount of USDT and still have it backed in value.
The standard explanation for this massive surge in USDT printing has been attributed to the rise in demand for the USD-backed stablecoin. However, this doesn’t explain away the fact that in the span of a few months, Tether claims to have sourced over $2 billion to back its equivalent in USD printed.
The plot thickens further when one looks at other stablecoins, who haven’t managed to see the same level of growth that Tether has gained. Even Tether’s greatest competitor in the USD-backed stablecoin market, Coinbase’s USD Coin (USDC), couldn’t achieve the levels of growth that Tether has done in recent times.
One must be wary of Tether until they definitively prove they have the money to back their coins. USDT will only function as long as no one asks questions, but someone will ask questions eventually. It’s only a matter of time before Tether is forced to reveal a full audit of its holdings, and the prognosis is grim indeed.