© Reuters. Tether is the safest crypto asset amid the US banking crisis
- It has become the most secure asset in the crypto world, according to Reuters.
- Investors are shifting their focus towards safe-haven tokens amid the US banking crisis shared on the news platform.
- Tether’s market capitalization has increased significantly and it is backed by dollar reserves.
Tether, a digital stablecoin, is emerging as the safest asset in the cryptocurrency world, according to Reuters. According to the news release, amid a growing banking crisis in the United States and increasing regulatory scrutiny on cryptocurrency companies, cryptocurrency investors are shifting their focus towards tokens and coins that are considered relatively safe.
Since March, Tether, a stablecoin pegged to a fiat currency such as the US dollar, has emerged as the best performing stablecoin as its market capitalization is seeing a significant increase.
Moreover, Tether’s value is backed by dollar reserves and has a fixed supply of around 85 billion tokens, maintaining a 1 to 1 peg to the US dollar. Due to high demand, the coin’s value has been holding above 1 since mid-April, reaching 1.002 last week.
Anders Kvamme Jensen, founder of Oslo-based global brokerage AKJ, stated,
The banking crisis is fueling a “bitcoin hyper” – the inevitable end that the dollar will be worthless.
Jensen added that this has led to a significant increase in investors turning towards leading cryptocurrencies such as Ether.
Stablecoins such as Tether are a store of value, a tool for transferring funds between cryptocurrencies, and are also used as collateral for derivatives trades. Tether’s premium price is due to the growing trust in its peg and its security from SEC scrutiny.
Meanwhile, Tether’s competitor, USDC, has incurred losses due to its exposure to a collapsing bank and regulatory pressure on fintech and cryptocurrency companies. Tether is owned by iFinex Inc and is seen as less focused on the US, which reduces regulatory risk.
Main benefit from major stablecoins through CoinMarketCap
In addition, it has become the third largest coin on CoinMarketCap, with a market capitalization of $82 billion and a stake of 6.83%.
Tether, the most secure crypto-asset amid the US banking crisis, debuted on Coin.