Tether stablecoin regains $83.2 billion lost market value in 2022 crash.

The largest stablecoin in the market, Tether, has achieved a new record high market capitalization, surpassing $83.2 billion.

This stablecoin is pegged to the U.S. dollar on a one-to-one basis and is supported by cash and cash-equivalent assets. Tether has recovered the $20 billion in market value it lost last year after the collapse of rival stablecoin TerraUSD.

“Today’s numbers demonstrate that people want access to financial freedom, and when given that access, they will make use of it,” said Paolo Ardoino, Tether’s CTO, in a statement. “Between our battle-tested resilience in the face of market volatility and our industry-leading transparency practices, Tether has proven that it can be trusted, and customers are responding in kind.”

During the instability that rocked the cryptocurrency market last year, Tether and other major stablecoins lost a significant portion of their market capitalization as investors began to leave the market due to increased uncertainty.

Although Tether has been able to recover the market value it lost last year, other stablecoins have not been as successful. USD Coin (USDC), the second-largest stablecoin, currently has a market capitalization of around $29 billion, far less than its all-time high of over $56 billion, according to CoinGecko data.

According to researchers at Kaiko, Tether is used in more than 50% of all trades on centralized exchanges.

Historically, there have been many controversies surrounding Tether. Many have questioned claims that it has enough reserves to justify its one-to-one peg claim, as well as the quality of assets making up those reserves.

In 2021, the New York Attorney General settled with Tether over allegations of commingling client and corporate funds and lying about its reserves to investors. Tether and its sister crypto exchange Bitfinex never admitted any wrongdoing.

Tether Pushes into Bitcoin Mining

Tether has recently announced that it is setting up a Bitcoin mining operation in Uruguay using renewable energy in a bid to diversify its revenue mix and “support and promote sustainable Bitcoin mining.”

Notably, Tether isn’t just mining Bitcoin, it is going to start buying it in bulk every month.

Last month, the company announced that it would shift its treasury management strategy to start investing a portion of its net profit in Bitcoin.

The company committed to using up to 15% of its net profit to purchase Bitcoin, following in the footsteps of giant electric carmaker Tesla and technology company MicroStrategy.

Meanwhile, Tether has also reported a Q1 net profit of $1.48 billion.

The company has “approximately 85% of its investments in cash, cash equivalents, and other short-term deposits, along with a 20% increase in token supply quarter over quarter and ~2.5B in excess reserves (on top of the 100% minimum reserves),” it said in the recent announcement.

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