The USDT Crisis – What is the Future of the Most Popular Stablecoin?

USDT or Tether was released in 2015 and became the first stablecoin revealing new perspectives for the crypto industry. Investors got possibility to turn their digital assets into cryptocurrencies backed by US Dollar. Despite the fact that team project underlined USDT is NOT a digital version of dollar many investors draw a parallel between this stablecoin and the most powerful fiat currency.

Minimal volatility and increasing trust

The idea tended to be really interesting. Each token was maintained by US Dollar. When 100 million tokens are released the company Tether Limited is obliged to store $100 million that support tokens.

Through its existence the stablecoin realized to be truly stable. There was noticed insufficient volatility even after serious crypto market disasters. The minimal price of a USDT token was $0.92 while its maximal price reached 1.06 dollars.

Recently crypto community commenced discussing possible crisis of the first and the most popular stablecoin. Those opinions are based on suspicious activity of the company Tether Limited. Thus cryptocurrency is gradually losing trust among the investors. BlackBall team is analyzing recent events and makes prognosis what is the future of the most popular stablecoin.

 Suspicions of being involved into manipulations

At the end of 2017 there appeared suspicions that some part of USDT tokens is not backed by fiat dollars. Moreover so called “Paradise Papers” revealed that Bitfinex crypto currency and Tether Limited Company were established by the same people. The stablecoin began losing trust at the background of assumptions that Tether price is artificially regulated for getting the influence on Bitcoin prices.

In July 2018 there was published FSS report expected to remove all suspicions but the situation became even more difficult. The report contained information that Tether Limited Company has 2.5 billion dollars in storage and all tokens are backed by fiat US Dollar. At the same time full audit was not provided and the company applied to law agency instead of accounting one.

The panic increases

In mid-October the crypto community was discussing speculations that Noble Bank faces problems. This financial institution operated accounts of Tether Limited and Bitfinex. The stablecoin price decreased and the company decided to destroy 500 million tokens. Market capitalization of USDT decreased by $700 million during the two weeks.

The company indicates that Tether treaty has 466 million more USDT tokens to be used in future emissions. Meanwhile the list of largest token holders of the stablecoin had changed. Top 3 holders of the stablecoin tokens are Tether treaty, crypto exchange Binance and unknown address while Bitfinex occupies only the 7th place in this ranking.

Future perspectives of the stablecoin

Nowadays Tether is still included into the top-10 cryptocurrencies by market capitalization volume (according to Coinmarketcap.com). At the same time the stablecoin lost much trust among the investors and traders who selected other altcoins or stablecoins.

Such stablecoins as TrueUSD, Paxos Standard and USD Coin are included into top-100 list by market capitalization. Their policy is more transparent therefore such cryptocurrencies have more trust among the investors.

Of course USDT is not in tremendous crisis and not going to collapse but in the nearest future Tether is expected to cease being called the most popular and interesting stablecoin from the point of view of investments.

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