Tether has a total market value close to USD 74 billion. In the last two years, its market capitalization has grown by 1,500%.
A report made by the firm Protos, which got revealed on November 10, highlighted that almost 60% of the supply of the stable coin Tether (USDT) gets concentrated in the hands of two companies: Alameda Research and Cumberland Global.
Tether is a stable coin pegged to the dollar that appeared for the first time in July 2014 as Realcoin, and got later named USTether and finally USDT.
According to the study, USDT became a linchpin of the cryptocurrency environment by enabling liquidity management and growth in the past seven years. The report highlights that the market value of Tether approached at least USD 1 billion when bitcoin reached USD 20,000 in December 2017, and its capitalization currently surpasses USD 70,000 million.
Protos played a vital part in the history of transferred USD between Tether treasury and other parties. These parties get divided into three categories: Market Makers, Funds, Companies, and Individuals. The amount of USDT that gets transferred between these entities is USD 108.5 billion, and it includes USDT.
There is a total amount of transferred funds to market makers, companies, and individuals. Market makers are independent companies that play the part as providers of liquidity and facilitators of the sale of assets.
According to Protos’ figures, at least USD 37.2 billion USDT has returned to Tether’s treasury. If there was a subtraction of that amount from the final amount transferred to these bodies, it resulted in a total of USD 75.8 billion. Tether’s supply approaches a figure close to $ 73.86 billion, which is a figure that shows a 2.5% discrepancy with Protos’ figures.
High Concentration of USDT under Market Makers’ control
According to a report by Protos, Alameda Research, initially created by FTX exchange CEO Sam Bankman-Fried, is the investment firm that acquired the most USDT from Tether’s treasury. Alameda received an amount that gets close to USD 36.7 billion in USDT, which is a figure that runs in parallel with 33.8% of the final amount sent by the Tether treasury.
Cumberland Global went through a curious situation. The entity is a subsidiary of the investment firm DRW and faced the acquisition of USD 23.7 billion in USDT, which is equivalent to at least 22% of the outgoing volume of Tether’s treasury. Then, Alameda and Cumberland have reported the acquisition of at least 55.8% of what got distributed by Tether in recent years.
Much of the regulatory attention in the United States of America is currently turning to stable coins today. Stablecoins Tether, Binance USD (BUSD), and USD Coin (USDC) are among the top five cryptocurrencies by daily volume traded, while USDT doubles the daily volume traded for bitcoin.
Despite various concerns regarding USDT raised in regulatory entities, participants prefer this stable coin over other options such as USDC and Gemini Dollar (GUSD). Also, USDT is more superior in volume traded than other decentralized stable coins like DAI (DAI) or TerraUSD (UST).
Three U.S. regulatory agencies – the Federal Deposit Insurance Corporation (FDIC), the Office of Currency Control (OCC), and the President’s Financial Markets Task Force (PWG) – warn that stable coins could become a normalized method of payment in the future.
By: Jenson Nuñez
