Like the rest of the cryptocurrencies and stablecoins, Tether (USDT) has also recorded a drop in its value and demand.
Its market share has also witnessed a great dip and despite that, it has continued to be the top choice of a stablecoin for the stablecoin holders.
Even now, USDT ranks as the number one stablecoin in the market with no visible competition. Although USDC ranks number two its valuation is much lower than number one.
USDT Ranks No. 1
In the stablecoin market, there is no other token that matches the might of USDT in terms of valuation and trading volume.
Despite the drop in valuation in the year 2022, USDT still accounts for 45% of the overall stablecoin valuation in the market. This gives USDT prominence as well as dominance over the rest of the stablecoins that have a smaller share.
Even the 45% dominance is a low figure for USDT as it used to have a valuation much larger than the current one in 2021.
USDT’s Valuation in Early 2022
Even when the year 2022 began, USDT had a higher valuation. At that time, the cryptocurrency market had started to face a demise and the situation was turning bad for the market.
In the following months and until now, the valuation of USDT has continued recording a fall in its valuation. At the beginning of 2022, USDT’s market share was 49% and until now, it has lost about 4% to come down to 45%.
USDC was expected to Surpass USDT
Towards the end of the year 2021, a concern was raised surrounding the reserves backing up the USDT. Many claimed that USDT was not backed by physical reserves at all.
With claims coming in that USDT had no physical backing or collateral, investors started losing interest in USDT. People simply started to move away from USDT and it started to lose its market valuation.
At this point, USD Coin (USDC) started to gain momentum and its valuation started to rise. This is because Circle, the company behind USDC’s issuance provided proof of the reserves backing it up.
Therefore, USDC started experiencing a rising in its valuation and thus, was expected to dominate the stablecoin market.
USDT Proved its Authenticity
However, iFinex, the company behind the issuance of USDT was also able to provide proof confirming that it was fully backed by physical reserves.
iFinex went on to confirm that 100% of the USDT was backed by cash, commercial paper, short-term deposits, cash equivalents, investments, secured loans, and many other mediums.
USDC has earned its Fair Share
Now, USDT and USDC are the only stablecoins in the market that are fully backed by physical assets and reserves. USDC’s dominance has also risen in the running year from 27% to 35%.
This makes it clear that people are considering USDC as safe as USDT while the latter dominates the market as it has been around longer than USDC.