May 9 (Reuters) – Digital The stablecoin, tether, is the winner of the race to become the crypto-world’s least risky asset. As the regional banking crisis in the United States intensifies and as regulatory crackdowns on crypto firms increase, crypto investments are shifting to tokens and coin that are perceived to be relatively safe.
Tether is the most valuable stablecoin – digital tokens tied to fiat assets like dollars – and its value has risen since April. The value of the tokens is determined by a 1:1 peg with a stash of dollars, and an upper limit on supply at 85 billion tokens. The coin’s peg has held at or above 1 since mid-April. The 1.002 mark was reached last week.
“The banking crisis is fuelling ‘hyper-bitcoinisation’ – the inevitable endgame that the dollar will be worthless,” said Anders Kvamme Jensen, OsloFounder of AKJ Global Brokerage and Digital Asset Specialist.
The rise of top cryptos such as bitcoin, ether and others has prompted a flight towards them, Jensen said.
Pegged Stablecoins, such as Tether, are seen as more of a store and tool for facilitating transfers between cryptocurrencies. They also serve as collateral in derivative trades.
Conor Ryder, Research Analyst at Digital Assets Data provider Kaiko said the premium on tethers reflects the growing trust that Americans have in the peg as well as its perceived safety. Securities Exchange Commission (SEC).
Tether Inc, a company registered in British Virgin Islands, owns the domain. This company also owns Bitfinex Exchange of cryptocurrency.
Tether’s main rival USDC managed by Boston-based Circle has suffered from the exposure of its collapsed Silicon Valley Bank and the SEC’s examination of crypto and fintech firms.
Another major stablecoin BUSD or the Binance USD token has experienced a drop since its developers stated that they would no longer be issuing tokens, after U.S. regulatory agencies labelled it an unregistered asset.
The DAI tokens have been hampered by their unusual pegs to reserves which include stablecoins, crypto currencies and other currencies.
“Tether is seen as less U.S.-oriented, meaning lower regulatory risk. Buying tether and bitcoin is really a vote against the U