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Tether is considered a stablecoin because it was originally designed to always be worth $1.00, maintaining $1.00 in reserves for every Tether issued. However, the company claims that tether holders have no contractual rights, other legal claims, or guarantees that the tethers will be redeemed or exchanged for dollars. On April 30, 2019, a lawyer for Tether Limited stated that each tether was backed by only $0.74 in cash and cash equivalents.
Tether Limited and its cryptocurrency have controversy due to the company's alleged role in manipulating the price of bitcoin, an unclear relationship with the Bitfinex exchange, its lack of a long-term banking relationship, and the company's failure to provide a promised audit showing adequate reserves backing the Tether token. Author David Gerard was quoted by the Wall Street Journal saying that Tether "is a sort of central bank of crypto trading... [however] they do not behave as one would expect from a responsible and sensible financial institution." The price of Tether dropped to lows of $0.90 on October 15, 2018, due to speculation that investors were losing faith in the token. On November 20, 2018, Bloomberg reported that U.S. federal prosecutors were investigating whether Tether was used to manipulate the price of bitcoin. In 2019, Tether surpassed Bitcoin in trading volume with the highest daily and monthly trading volume of all cryptocurrencies in the market.
It has been officially listed on various top-tier exchanges and since its listing, it has shown strong upward momentum and solid price movement. Currently, the market capitalization is at $134 million and the daily trading volume is at $268 million.
