Why is Tether USDT, the stablecoin pegged to the US dollar, becoming so popular? Perhaps in part because of the price drops of cryptocurrencies as well as predictions of an impending global economic crisis.
Why are the volumes of USDT and also XAUT, the stablecoin linked to the price of gold, increasing so much?
The Cryptonomist talked about it with Paolo Ardoino, CTO of Bitfinex and Tether.
“Traders and users, in general, prefer USDT to the dollar because Tether USDT can be moved much faster (in a few seconds) on the blockchain while dollars can only be moved via wire bank transfer. Owning Tether USDT is the best way to have the stability of the dollar, whilst enjoying the advantage of being able to move funds in real-time and capitalizing on favourable market conditions. In addition, Tether USDT is a cryptocurrency, allowing users to maintain full control over their assets”.
According to research published by Messari, while the market capitalization of bitcoin (BTC) has dropped by 37% since mid-February, Tether USDT has grown by 38%, or almost $2 billion.
Over the same period, XAUT grew by about 40%, although its market capitalization remains less than 10% compared to Tether USDT.
According to Ardoino, the reason for this difference is currently reflected by the fact that:
“USDT is more stable than XAUT. Both are good choices, but they have different uses. In addition, USDT can be used to buy goods and services, while XAUT is newborn and therefore its adoption is lower at the moment”.
Generally speaking, gold – in this period of economic uncertainty – is certainly gaining new supporters, with a 6% increase in its price in recent days, with its correlation with the price of bitcoin also on the rise.
