Tether dominates with $113B post-SVB collapse

Tether’s market cap surges post-SVB collapse, driven by liquidity and accessibility, says ITB’s Vincent Maliepaard.

Tether has reached a circulating supply of $113.13 billion as of July, marking a significant milestone since the collapse of the Silicon Valley Bank (SVB) in March 2023.

According to IntoTheBlock (ITB) data, the collapse of SVB in 2023 marked a significant turning point for the stablecoin market as traditional finance (TradFi) institutions fled to USDT (USDT) for stability.

Speaking with Cointelegraph, Vincent Maliepaard, marketing director at ITB, explained that USDT’s accessibility and liquidity are the “key reasons for its dominance” as the “go-to stablecoin for traders and investors.”

“Its presence as a base trading pair on most exchanges makes it an easy solution for transferring value or to hedge against market volatility.”

Related: Crypto Biz: Tether to track USDT usage, Cipher gets takeover offer, and more

Stablecoin market capitalization

The overall growth of stablecoin market capitalization has continued post-SVB collapse, rising from $137.86 billion in December 2022 to roughly $150 billion by July 2024, per ITB data.

The stablecoin market is gaining global exposure with regulatory initiatives like the new Swiss Financial Market Supervisory Authority (FINMA) stablecoin issuer guidelines.

According to ITB data, this increased exposure has led to trust and increased liquidity in the market as stablecoins like DAI, FDUSD, and USDM witness transactions exceeding $100,000.

Related: Plaintiffs amend complaint in Tether lawsuit for alleged USDT scheme

USDC takes second place

Circle USD (USDC) made regulatory strides in July, becoming the first global stablecoin issuer to comply with the new European Union’s Markets in Crypto-Assets (MiCA) regulatory framework.

However, despite this development and its $33.71 billion market capitalization in the stablecoin market, the expanse between it and USDT’s $113.13 billion market cap is substantial.

Discussing this rationale behind USDT’s success, Maliepaard explained that USDT has a role beyond decentralized finance (DeFi) and trading.

“USDT presents a compelling value proposition for individuals and businesses in regions facing hyperinflation or economic instability. It serves as a stable financial tool, offering reliability and stability.”

Related: Tether hires Chainalysis’ chief economist for USDT usage reports

Illicit use of USDT

An Elliptic Research report on July 10 revealed that a Cambodian conglomerate group, Huione Group, was implicated in facilitating online scams in Southeast Asia.

The report revealed transactions surpassing $11 billion linked to money laundering and cyber scams on the Huione Guarantee marketplace, predominantly through USDT use.

However, the use of USDT made it far easier for illicit funds to be tracked via the blockchain public digital ledger than traditional fiat flows.