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Despite the mid-2022 turmoil caused by Terra, Tether (USDT), the largest stablecoin pegged to the U.S. dollar, has remained resilient and is currently thriving. Its market value has been steadily increasing and is now very close to reaching its all-time high.

According to data from CoinGecko, Tether's market capitalization has risen by more than 20% to $80 this year, with a surge in valuation of 12% in just the past four weeks.

Tether's market capitalization has increased significantly, bringing it within $3 billion of the record high of $83 billion achieved in May of the previous year.

According to Markus Thielen, who serves as the head of research and strategy at Matrixport, a crypto services provider, tether's increased valuation can be attributed to the "aggressive minting and issuance" that has taken place on the Tron Network. This particular network has a larger presence in mainland China than Ethereum and places a greater emphasis on the movement of money.

Matrixport's data reveals that more than half of the current market value of the stablecoin tether can be attributed to its issuance on Tron.

As bitcoin's price has soared, tether's market capitalization has also experienced a significant increase. However, Circle's USDC stablecoin, the world's second-largest dollar-pegged coin, has seen a 27% decrease in market capitalization, currently valued at $32.5 billion. This drop in value can be attributed to investors' retreat from USDC after Circle announced that it held $3.3 billion with failed Silicon Valley Bank (SVB) last month.

Paxos' centralized, dollar-pegged stablecoin BUSD has seen a significant decrease in market value this year, dropping by 58% to $7 billion. In February, the New York Department of Financial Services issued an order for Paxos Trust Company to halt the production of BUSD. Paxos complied with the order and ceased minting new tokens, but has committed to redeeming existing tokens until February 2024.

Matrixport suggests that certain USDC holders may have diversified their holdings by investing in tether and bitcoin.

"When news about unlimited support for bank deposits made the rounds, bitcoin prices exploded from $20,000 to $28,000 within a matter of days," said Thielen in a note to clients on Thursday. "But it would appear that holders of USDC either converted their Circle stablecoin into Tether's USDT or that they simply sold $10 billion of USDC and bought bitcoin instead."

Source Coindesk