Written By In the world of cryptocurrencies, Tether is a name that has become synonymous with stability. It’s a stablecoin that’s pegged to the US dollar and used by traders to move funds between exchanges without having to worry about fluctuations in the value of other cryptocurrencies.
But Tether has had its share of controversy as well. There have been concerns about whether the company actually has enough reserves to back up the Tethers in circulation. And in recent months, the company has been embroiled in legal issues, including an ongoing investigation by the New York Attorney General’s office.
But despite all this, Tether has managed to bounce back from a major dip in market value that occurred during the recent cryptocurrency market crash.
At the beginning of 2021, Tether’s market capitalization was around $24 billion. But by May, it had dropped to around $22 billion, as the cryptocurrency market as a whole took a hit. Bitcoin, the largest cryptocurrency by market capitalization, saw its value drop from over $60,000 in April to below $30,000 in June.
During this time, Tether’s critics were quick to point out that the company’s reserves were not being audited and that it could be in trouble if a significant number of users decided to cash out their Tethers at the same time.
But despite these concerns, Tether has managed to recoup almost all of its lost market value. As of mid-April, its market capitalization was back up to around $24 billion.
So, how did Tether manage to bounce back?
One reason could be that the company recently released an attestation report from an accounting firm that claimed that Tether had enough reserves to back up its Tethers in circulation. While this is not the same as a full audit, it does provide some reassurance to users and investors.
Another reason could be that Tether is simply seen as a safe haven in the cryptocurrency world. While other cryptocurrencies can be highly volatile, Tether’s value is always supposed to be pegged to the US dollar. This stability could be attractive to investors who are looking for a more reliable store of value.
Of course, it’s also possible that Tether’s recovery is simply part of a larger trend in the cryptocurrency market. Bitcoin, for example, has also seen a significant recovery in value since its low in June.
But regardless of the reasons for Tether’s recovery, it’s clear that the stable coin is still a major player in the world of cryptocurrencies. And as long as the cryptocurrency market remains volatile, there will likely be a demand for stable coins like Tether that offer some measure of stability and predictability.
