- Crypto executive explains the issue with Tether
- Tether’s USDT stablecoin volume has risen remarkably
- Over-the-counter traders have helped push Tether’s volume
Cryptocurrency News Today – despite a recent strong downturn for cryptos, which included Bitcoin’s 50% decline on March 12, the sum of Tether’s USDT stablecoin (volume) in existence has since exploded. The report says the market cap of the asset has now surpassed $6 billion.
This means a total of $1 billion has added to this metric over the last two weeks. In a $200 billion industry, such inflows can be termed as dramatic. Besides, alternative stablecoins Paxos Dollar, USD Coin, and Binance USD pairs have posted dozens of millions. The question is what is driving the demand for stablecoins?
What Pushed Tether’s Market Cap Higher?
Sam Bankman-Fried, the CEO of FTX and Alameda, recently talked about Tether. Here are the factors he suggested:
- Over-the-counter traders (from Asia) are acquiring USDT. It is well known that Chinese traders utilize Tether because they do not have full access to the crypto markets. Some see USDT as a good way to send money globally even if you don’t want to deal with Bitcoin.
- People are selling off their Bitcoins for USDT hedges.
- People are selling off their Bitcoin for USDT to reduce their risk levels.
According to the Commentator, these factors are driving up the value of USDT and its supply.
What’s Next for BTC?
Even though most of Tether demands have risen due to sell-side demand instead of investors trying to purchase BTC with Tether, the strong rise in blockchain dollars may boost the market value of the crypto in the future. Charles Edwards, a cryptocurrency manager, cited in January that big changes in the market cap of Tether have made Bitcoin’s price in the last one and a half years. This was proven true when the price of BTC rallied to as high as $10,500 in mid-February after the pseudo-indicator spotted a month before.
Before the 50% crash in November 2018, the sum of USDT in circulation fell by hundreds of millions. Additionally, before most of 2019’s 330% rally became the printing of hundreds of millions USD worth of the coins. This record-level of USDT printing currently happening would suggest that the price of Bitcoin will soon see a record rally. This makes sense fundamentally although there are some details regarding how you can deposit the USD and receive USDT in return. Introducing fiat into the industry via stablecoins should act as a catalyst for BTC’s growth when holders of USDT sell their tokens for BTC or any other digital currency.