Tether, A controversial stable coin

6 Apr, 2020
Category: Financials
Tags: Crypto

Tether is a cryptocurrency token pegged to the US dollar. 1 Tether (USDT) is always equivalent to 1 US dollar (USD). To use an analogy, Tether is a bit like a casino chip, and this chip is affecting the price of a billion-dollar size asset class.

Tether has long dominated the fiat proxy landscape, accounting for 98% or more of daily stable coin trading volume. However, this coin is highly controversial.

The crypto-token, whose market cap currently stands at $6.5 billion is viewed as a systemic risk to the crypto market. It plays a prominent role in Bitcoin price discovery, and virtually all other cryptocurrencies derive their values from Bitcoin.

The price of Bitcoin always rallies as Tether Treasury mints extra USDT. Does this undermine the neutrality of Bitcoin?

I think so.

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