The on-chain fundamentals for Tether leave a lot to be desired, with much of USDT being concentrated in just 104 wallets. Daily trading volume for the stablecoin continues to exceed Bitcoin’s.
Tether (USDT) has been controversial for some time, to say the least. However, this has done little to nothing to curtail its rise. In fact, Tether is now the most popular cryptocurrency in the entire market. It even consistently boasts higher trading volumes than Bitcoin does.
The on-chain metrics for Tether, however, leave some room for concern. As IntoTheBlock recently investigated, there’s some good news and bad news:
- 104 addresses control 70% of the circulating supply. This effectively means that 104 addresses have, in total, $2.8B worth of USDT. Given the shadiness surrounding USDT, this should be especially concerning.
- Large transactions are booming on Tether. In the last seven days, the total volume of transactions over $100,000 was around $2.4B in total.
- The average length of time USDT is held is around 17.8 days. This is to be expected, after all, since USDT is not for HODL’ing.
What does this tell us about USDT? The on-chain metrics clearly tell us that USDT is dominating the market. The total volume of its larger transactions exceeds anything on Bitcoin or Ethereum. However, the concentrations of wealth seen on-chain are extreme. With $2.8B in the hands of just 104 addresses, it’s hard to imagine this coming about organically.
The fundamental cause for concern is that Tether is likely not exactly backed by dollars on a 1:1 basis. As BeInCrypto previously reported, Tether’s co-founder recently said that it “doesn’t matter” if USDT is backed by the exact same amount of dollars. That’s a massive red flag.
It remains to be seen whether Tether’s extreme concentrations of wealth could end up hurting the entire market in the end. If this house of cards ever ends up falling, the impact can’t be understated.
Do you think that Tether is stable with its current distribution of wealth? Is it a cause for concern? Let us know your thoughts in the comments below.