The latest volatility in the cryptocurrency market appears to be giving stablecoins a boost, as crypto investors gravitate toward currencies seen as less vulnerable to sharp gyrations. The market capitalizations of leading stablecoins including tether and USDC have jumped in the past 24 hours, gaining hundreds of millions of dollars. With their value pegged to the U.S. dollar, stablecoins are viewed as safer assets that investors can turn to during times of high unpredictability.
The coins have had a remarkable year so far. Though tether was deemed “irrelevant” by MicroStrategy CEO and crypto bull Michael Saylor in January, its market cap has since nearly tripled to more than $63 billion.
But it is the meteoric rise of USDC, whose market cap has surged to $25 billion from $4 billion since Jan. 1, that brings up big questions about whether tether can maintain its position as the pre-eminent stablecoin, especially as regulators step up their scrutiny of the crypto sector.
Indeed, there are lingering uncertainties about the reliability of tether’s dollar reserves. Tether, the issuer of the eponymous cryptocurrency, released data last month that many in the crypto world felt didn’t show clear evidence the company had enough cash reserves to cover the stablecoins in circulation. Tether is required to release the data as part of an agreement reached with the New York State attorney general’s office over allegedly fraudulent activity. That deal also barred Tether from doing business with New Yorkers.
Stuart Hoegner, Tether’s general counsel, said that the recent reserve breakdown shows that the stablecoin is fully backed and that the company plans to make additional audited financial statements available to the public.
Owen Lau, an executive director at Oppenheimer, said he wouldn’t be surprised if doubts about tether resulted in USDC eventually surpassing tether as the stablecoin with the biggest market cap.
“I have more confidence in USDC because of the question mark tether has,” he said.
Lau said his faith in USDC stems from the fact that the stablecoin is backed in part by Coinbase, which he said has a strong reputation for regulatory compliance.
USDC co-founder Circle regularly reports that each USDC has a dollar to back it up, said Dante Disparte, chief strategy officer and head of global policy for the digital payments company. Disparte, who until this spring served as vice chair of Facebook’s Diem stablecoin project, said that Circle uses accounting firm Grant Thornton to verify the reserves backing USDC.
This transparency has helped drive the growing adoption of USDC and set it apart from other digital currencies, according to Disparte.
“Not all stablecoins are created equal,” he said.
JOHN MCAFEE FOUND DEAD
Antivirus software creator and crypto enthusiast John McAfee was found dead in a jail cell in Barcelona after a Spanish court ruled in favor of extraditing him to the U.S. on criminal charges that included cryptocurrency fraud.
Federal prosecutors had accused McAfee of engaging in a $2 million “pump-and-dump” scheme where he bought a large amount of altcoins and then promoted them and inflated their value with misleading tweets before selling them. He also allegedly earned money illegally by promoting crypto startups on social media without disclosing that he was being paid to do so.
Although other celebrities like Paris Hilton, Jamie Foxx and Floyd Mayweather Jr. have gotten in hot water for promoting cryptocurrencies on social media, McAfee’s alleged behavior, as well as the potential penalties he faced, were some of the most extreme examples of how famous figures can get caught up in crypto.
McAfee’s death is believed to be the result of suicide, but bizarre conspiracy theories and comparisons to the demise of disgraced financier Jeffrey Epstein abounded on Twitter, further complicating this strange end to a controversial life.
STARTUP TO WATCH
Helium

Based in: San Francisco
Investors: Union Square Ventures, Multicoin Capital, Khosla Ventures, GV, FirstMark, Munich Re Ventures, Marc Benioff.
Funds Raised: $51 million
What Sets It Apart: Founded in 2013, Helium uses blockchain technology to build a decentralized wireless network.
The idea behind Helium is to allow individuals to both participate in and profit from their own wireless network without the use of a major telecom company as a middleman.
People can purchase a Helium Hotspot for around $600 to join the wireless network as bandwidth providers. The Hotspot is comparable to a WiFi router—it creates a long-range radio signal that low-power devices, such as a wireless pet collar or wildfire detector, can connect to. It also mines HNT, the cryptocurrency native to the Helium blockchain that Hotspot owners are rewarded with for providing wireless coverage.
“We sort of stumbled into the idea of using a sort of crypto economic model to incentivize people to build out a network,” said Helium CEO Amir Haleem.
Helium announced Wednesday that it currently has 65,000 active Hotspots around the world. Haleem said on average, the company is adding more than 1,000 Hotspots a day, despite hardware shortages related to the Covid-19 pandemic.
DEALS
- Decentralized finance protocol Yield closed on a $10 million Series A funding round led by Paradigm.
- Crypto intelligence provider Kaiko raised $24 million in Series A funding from investors led by Anthemis and Underscore VC.
- NFT marketplace Rarible secured $14.2 million in a Series A funding round led by Venrock and CoinFund.
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