Tether’s Future Shrouded With Doubt As New Stablecoins Appear - Cryptocurrency News. Wednesday, September 26
Tether’s Future Shrouded With Doubt
In recent months the concept of stablecoins has gained tractions. These coins offer the safest and fastest way for investors to protect themselves from the market’s notorious volatility. Just days ago, New York-based crypto exchange, Gemini launched its U.S dollar pegged coin (GUSD). Today, September 26, Circle Invest also announced they were getting in on the action. The exchange has also launched its stablecoin (USDC). With these coins becoming popular and coming up by the day, a question comes to mind, are they good enough to compete with Tether?
The Controversy That Tether Can't Seem To Shake
Tether (USDT) is a stablecoin and its value is tied to the U.S dollar and in essence, is backed by reserves. This then sounds like every crypto trader’s answer to a bear market.
Traders can exchange their altcoins during a bear market with Tether, and they are guaranteed that the price will not go below the dollar value. Unfortunately, this stablecoin has not had the best year.
In June 2018, researchers from the University of Texas published a paper claiming that Tether had manipulated bitcoin prices during the crypto boom at the end of 2017. The researchers detailed how they followed the coloration between Tether and bitcoin prices. They also went ahead to say that Tether was using Bitfinex crypto exchange (which it has been tied to in the past).
Again, in August the stablecoin came under fire after it delayed giving documents that show that it holds more than $2.5 billion in its reserves. Many speculated that the coin might not be backed by a legit reserve and might not hold the $2.5 billion total amount.
Although all these claims are unconfirmed, they have completely destroyed Tether’s reputation and it will be a long time before it can get investor’s trust and confidence. If Tether doesn’t find a fast way to redeem itself, then newer stablecoins such as USDC from Circle and GUSD from Gemini will fly past it.
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