Crypto Apr 25, 2020

Tether Beats XRP to Assume Third Position in Crypto Market Capitalization

Tether has attained position 3 in ranking the largest cryptocurrencies…

The raging COVID-19 pandemic has gravely affected the world stock market and hit global economies very hard.

In the meantime, the economic impact of coronavirus-induced lockdowns have influenced a marked increase in demand for digital assets like Bitcoin with many people reeling at the idea that some central banks and the Federal Reserve may move to flood economies with freshly-printed cash.

Well, as the stock market crash had initially left the crypto industry untouched, things have changed dramatically as the Bitcoin price has taken a nose dive to stand a new low. This event has also accompanied by a change in price performance of other cryptocurrencies that have adjusted their financial significance accordingly.

Today, Tether has replaced XRP, a cryptocurrency created by Ripple Labs, to attain position 3 on the list of the largest cryptocurrencies by market capitalization.

As it stands, Tether, which is a digital asset pegged on the U.S. dollar and is known to provide crypto traders with the much-needed protection against digital coin price volatility, saw a rise in its valuation rise to beat the $7.5 billion mark on April 22.

All the while, the XRP market size has constricted to a under $5.5 billion – an event that was analyzed as a mini disaster in which XRP prices dropped into negative territory in a 4-month timeframe.

The Rise in Tether Demand

The increase in Tether’s market capitalization occurred within the chaotic economic ecosystem that typified the first quarter of 2020. Typically, investors have always considered gold and Bitcoin as safe-haven assets in comparison to others like stocks.

The current disturbance within the crypto industry was unusual, considering that the so-called safe havens have collapsed amid the COVID-19 pandemic.

Elsewhere, Messari had written about a marked rise in demand for stablecoins owing to the fact that traders expected an erratic price volatility in the context of other crypto assets. The notion was drawn from the macroeconomic crisis that has accompanied the current pandemic in which Bitcoin and other digital assets would take a dive as equities and commodities take a downward trajectory.

In all the happenings, XRP became one of the victims in the March cryptomarket crash, nose diving at 24.32 percent to reach a circa $0.17 by the end of the month. Conversely, a significant increase in trader appetite for Tether was witnessed – earning the topmost stablecoin the title of “greatest beneficiary of the coronavirus pandemic”.

Why Choose Tether?

Within the crypto space, it is quite common to come across stories of people suffering anxiety after investing their hard-earned money in digital assets. The source of this fear is usually pegged on the high volatility of cryptocurrencies, which begets untold uncertainty as far as the propensity of economic loss is concerned.

However, in the context of Tether investment, this fear worry is easened as far as the erratic market situation is concerned. This aspect is brought about by the fact that the value of this cryptocurrency is fixed at the equivalence of 1 U.S. dollar (USDT). This ensures that the coin remains relatively stable as it does not give in to the wavy nature of the crypto markets.

The primary reason for creation of the Tether coin was to establish a much-needed bridge between fiat currencies and digital currencies – to offer transparency, stability, and minimal charges in the context of user transactions.

While this can be considered to be significant among the many advantages of Tether, those seeking to make quick bucks with crypto should avoid investing in the coin. This aspect holdstruth since profits would be limited considering that the Tether price is designed to not surpass the value of the U.S. dollar.

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