Bitcoin loses world’s most used cryptomeda rank

Tether assumed the position of largest daily volume in October, while Bitcoin consolidates itself as a value reserve.

Bitcoin is the first cryptomeda the world has seen, although the digital currency is the most famous and also the most valuable in terms of market capitalization ($ 340 billion), when it comes to volume the leadership was taken in October by a stablecoin. [Via Decrypt].

The new leader, Tether, is a dollar-based crypto currency, that is, each Tether (USDC) is worth $1. The currency is used in transactions between brokerage houses and also as a form of „hold“. Since currency has a fixed price, some traders prefer to leave their funds in USDC until the next day when they trade again.

These two basic utilities alone already account for much of the currency volume, but by 2020 the adoption of the asset has achieved a considerable increase.

Tether is also used for international transfers by large institutions, an alternative to the Swift system. Even the U.S. government uses the asset to send funds to Venezuela.

According to data from CoinMarketCap, the average monthly volume of the digital asset has skyrocketed since January 2020, in the last 24 hours for example, Tether has almost doubled the volume of Bitcoin, which has $26 billion in volume against Tether’s $44 billion, the volume is greater than the three largest crypto currencies together, BTC, ETH and XRP.

The reason for the high volume, according to Decrypt, is that the digital asset is widely used in OTC transactions, 33% of the currency volume is moved in China, almost double the visa in North America (17%).

In moments of crypt market drop several investors convert their assets into Tether, a way to minimize losses.

The purpose of the currency as well as other stablecoins is very clear, the asset aims to provide liquidity to cryptomoins brokers by creating a more stable means for prices in relation to fiduciary currencies.

The rapid growth in the volume of USDT transactions is certainly a great achievement for Tether, but for the network, the growth has brought problems of slowness. One of the solutions to this scalability problem was to adopt 6 different Blockchains, the transactions at Tether are now processed by the Ethereum, EOS, Liquid, Algorand, Omni and Tron network.

Tether continues to grow at a rapid pace, and with an eye on this market, Facebook is preparing its own stablecoin, Diem. It remains to be seen whether the social networking giant will be able to take over Tether.

Another threat to digital assets is a new law that may be passed in the US, the STABLE Act, a bill that wants to require stablecoin issuers like Tether to acquire bank licenses and have Central Bank approval.

This is also a difference between Tether and Bitcoin. While the former lives on its knees for regulation and are subject to what regulators want, the latter is decentralized and censorship resistant.

That’s why a Bitcoin is worth R$ 100 thousand and a Tether is worth R$ 5.