Tether, a digital stablecoin pegged to the US dollar, is gaining popularity as the “least risky” asset in the cryptocurrency market. With a regional US banking crisis and a regulatory crackdown on crypto firms, investors are looking to tokens and coins perceived as safe.
Tether is currently the top performer among stablecoins, with its market value soaring since March. Its value is anchored by a 1-to-1 peg against a cache of dollars and a supply cap of around 85 billion tokens. Tether’s trustworthiness is also reflected in its premium, as investors trust both its peg and perceived safety from the US Securities and Exchange Commission (SEC).
As Tether is seen as less US-oriented, it is perceived to have lower regulatory risk, and buying it is considered a vote against the US system. Despite past doubts about its peg being backed by dollar reserves, Tether has become the industry’s most trusted stablecoin.