The relationship between Tether (USDT), which is nominally linked to the US dollar, and Bitcoin trading has been in the news
a lot in the past few days. This prompted me to find out more about Tether and the first stop was coinmarketcap.com
where Tether is currently listed as the 10th largest cryptocoin by value of coins in issue. It is still very small however, at just over 1% of the total market. In fact, the dominance of Bitcoin is trememdous. I have computed an active total market cap share, ignoring coins for which at least one of the following is missing: one hour return, one day return, one week return. Bitcoin is near 43% and over half of the share attributed to the top ten coins. Only Ethereum is of nearly comparable size, followed at a distance by the Ripple XRP.
It seems rather unlikely that a substantial proportion of the hundreds of assets below 1% will every go somewhere and I think it would be safe to consider them to be noise... Now, the market cap
of a cryptocoin is a fairly nebulous concept for
- it could be quite thinly traded compared to the volume in issue (just like ordinary financial assets) and also
- the volume actually in issue could be unknown because unlike shares in a company, it is possibly to actually lose cryptocurrency and it has been argued that one third if the Bitcoin in existence is in fact no longer there.
However, for these reasons it is likely that the market cap of the larger cryptocoins which are more liquid, reflect more value than those of the minnows with less than 1% of the total. Perhaps MaidSafeCoin, number 69 and market cap near $150m, is going somewhere but I might be prepared to short it.