The daily trading volumes have spoken, and the most used crypto is not Bitcoin -- it's Tether.

The controversial currency that back in 2014 guaranteed $1 for every ₮1 has surpassed bitcoin by about 3.5 billion in volume despite having a market capitalization of only 2.8% of Bitcoin's market cap.

The surge in volume could be attributed to how traders treat the cryptocurrency. Many traders prefer Tether (USDT) since it can be transferred to crypto exchanges with relative ease as the digital coin doesn't have to travel through the traditional banking system. The 1 to 1 peg to the greenback makes it also an attractive dollar substitute.

Although that peg turned out to be 26 cents short when a filing in April reported that Tether Limited only possesses cash and cash equivalents of about $2.1 billion dropping the $1 peg to 74 cents, the volume for the stable coin still kept inching past Bitcoin consistently.

Bitcoin and Tether correlation

Tether is believed to power Bitcoin rallies that when there's a new mint for Tether, it's almost sure that Bitcoin will go up in price.  

According to Decrypt, wealthy individuals preorder Tethers days in advance to dump them on the market.  

"Tethers are useful to these large holders, who can trade them—paired to Bitcoin, Ether, Litecoin and other coins—on high-liquidity exchanges that don't accept fiat currencies."

Modern Consensus showed a chart for how the 30-day moving average of Tether's velocity (volume divided by market cap) closely moves in tandem with Bitcoin's price.

Fake Trading

Tether volumes were, however, alleged to be manipulated and are the results of washing trades. Wash trades pertain to buying and selling the crypto asset simultaneously to create artificial trading activity. Higher volumes can make an asset appear more attractive.

BTI or the Blockchain Transparency Institute in its Market Surveillance Report for September stated that, "Over the past 90 days, the top stable coin remains USDT, which accounts for 94% of all actual stable coin trading volume with wash trades removed. In terms of wash trading, USDT has the highest value among our Top-40 leading exchanges over the past 90 days, at 67.3%."

In April, Bloomberg reported that Tether is being investigated for "participating in a cover-up to hide the loss of about $850 million in client and corporate funds."

Bitcoin in Emerging Economies This picture shows a person holding a visual representation of the digital crypto-currency Bitcoin, at the 'Bitcoin Change' shop in Tel Aviv, Israel, Feb. 6, 2018. Photo: JACK GUEZ/AFP/Getty Images