Market Capitalization Of Tether Approaches $70 Billion As Stablecoin Competitors Suffer

With the SEC halting Paxos’ issuance of BUSD, the third-largest stablecoin, Tether’s USDT has witnessed a resurgence in its market capitalization, approaching the $70 billion mark.

According to the SEC, Paxos has violated investor protection laws by white-labeling BUSD, a stablecoin backed by the US dollar, which the agency considers a security. However, Paxos has vehemently disagreed with the SEC’s position.

Following the news, the market capitalization of BUSD has decreased by approximately $2 billion since February 13, and as of February 16, it stands at around $14 billion, the lowest level since January 2022.

In response to the SEC’s crackdown, USD Coin (USDC), the second-largest stablecoin by market capitalization, also experienced a capital outflow. Between February 12 and 14, its supply dropped from $41.29 billion to a low of $40.99 billion. 

Nonetheless, after Circle clarified that the SEC had not threatened it with a lawsuit, the supply of USDC rebounded to $41.30 billion on February 15.

Following the regulatory crackdown on stablecoin firms based in the US, Tether, the top stablecoin, has witnessed a surge in its market capitalization, crossing $69 billion.

As of February 16, Tether’s market dominance stood at 69.83B, fueled by nearly $890 million of inflows since February 12.

The increase in Tether’s market cap suggests that investors may have been spooked by the crackdown on BUSD and turned to Tether for safety. Despite investigations into Tether’s accounting practices, which aim to prove that its USDT supply is not fully backed by the dollar, Tether has consistently refuted the claims, offering regular assurance opinions from third-party accounting companies each quarter.

Tether is owned by iFinex, a Hong Kong-based firm that also owns the Bitfinex cryptocurrency exchange.