Bitcoin isn’t world’s most widely used cryptocurrency

Bloomberg

What’s the world’s most widely used cryptocurrency? If you think it’s Bitcoin, which accounts for about 70 percent of all the digital-asset world’s market value, you’re probably wrong.
While concrete figures on trading volumes are hard to come by in this often murky corner of finance, data from CoinMarketCap.com show that the token with the highest daily and monthly trading volume is Tether, whose market capitalisation is more than 30 times smaller.
Tether’s volume surpassed that of Bitcoin’s for the first time in April and has consistently exceeded it since early August at about $21 billion per day, the data provider says.
With Tether’s monthly trading volume about 18 percent higher than that of Bitcoin, it’s arguably the most important coin in the crypto ecosystem.
Tether’s also one of the main reasons why regulators regard cryptocurrencies with a wary eye, and have put the breaks on crypto exchange-traded funds amid concern of market manipulation.
“If there is no Tether, we lose a massive amount of daily volume — around $1 billion or more depending on the data source,” said Lex Sokolin,
global financial technology co-head at ConsenSys, which offers blockchain technology.
“Some of the concerning potential patters of trading in the market may start to fall away.”
Tether is the world’s most used stablecoin, a category of tokens that seek to avoid price fluctuations, often through pegs or reserves.
It’s also a pathway for most of the world’s active traders into the crypto market. In countries like China, where crypto exchanges are banned, people can pay cash over the counter to get Tethers with few questions asked, according to Sokolin. From there, they can trade Tethers for Bitcoin and other cryptocurrencies, he said.
“For many people in Asia, they like the idea that it’s this offshore, opaque thing out of reach of the US government,” said Jeremy Allaire, chief executive officer of Circle, which supports a rival stablecoin called USD Coin. “It’s a feature, not a problem.”
Tether, which is being sued by New York for allegedly
commingling funds including reserves, says using a know-your-customer form and approval process is required to issue and redeem the coin.
Asian traders account for about 70 percent of all crypto trading volume, according to Allaire, and Tether was used in 40 percent and 80 percent of all transactions on two of the world’s top exchanges, Binance and Huobi, respectively, Coin Metrics said earlier this year.