While cryptocurrency prices seem to be extra volatile lately, Bitcoin is sitting below the $9,200 level. Crypto traders find Altcoins more attractive as Bitcoin trades sideways. Sharing the spotlight with these widely traded coins is Tether. According to CoinMarketCap, Tether is the top traded coin by volume followed closely by Bitcoin.
Most regard highly traded coins as “healthier.” They are theoretically less prone to large price swings do to the depth of order books. For this reason, trading volume is a good indication of a coin or token’s strength. Tether’s price of ~$1.00 is somewhat immune to price changes, although they do happen occasionally. Originally launched on Ethereum, Tether is now available on other blockchains, including Tron and coming soon to Algorand.
The reliance on Tether and other stablecoins to take profit from trades are readily apparent. In a report from Coinmetrics, the amount of value stored in stablecoins recently eclipsed Bitcoin. This crossover has occurred within the last two months.
The report opines that stablecoins can usher in a new wave of crypto users. “Stablecoins could be the gateway that helps spur crypto’s global adoption, and boost usage of BTC and other cryptoassets along the way.“
This assertion seems plausible. As crypto is synonymous with volatility, making Tether payments would be “safer” than paying in Bitcoin. The recent pump in Dogecoin demonstrated that the younger generation is comfortable taking risks with cryptocurrencies. Users could easily transition to other cryptocurrencies after they become comfortable handling stablecoins.
The report hypothesizes that a sharp increase in the total stablecoin supply occurred on Marth 12th in conjunction with a massive sell-off in the stock markets. Looking at the S&P 500 chart, we can see this coincided with the COVID-19 fears.
Unfortunately, Tether’s popularity has made it a target for criminals and scammers. As we have previously reported, law enforcement has pressured several exchanges to freeze Tether accounts tied to illegal activities. There are mechanisms to obscure or “mix” tether transactions though these are not well known.
The only way to completely anonymize Tether would be to launch in on Monero or another privacy blockchain. However, a cursory search does not reveal such a project yet. It is possible that once Tether ports to Ethereum 2.0, it could benefit from additionally promised privacy functions, including zero-knowledge proofs.