Did you miss Tether's recent velocity?
Did you miss Tether's recent velocity?

By paragism | paragism | 1 Apr 2020


Cover Image - Created by the author using free vectors

In the recent cryptocurrency market crash of March’20, Bitcoin price dropped to the level of $4000 in several exchanges. Bitcoin bounced back to the level of $6000-6500. Market is bearish but stablecoins are doing amazing. Tether’s USDT just crossed 6 billion market capitalization. In last a few days, 1.5 billion+ USDT came into supply. USDT, currently ranked at no 4 position of Coinmarketcap, is just behind XRP and the gap is diminishing fast. Other stablecoins like Paxos Dollar, USDC, BUSD also registered increase in supply.

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Coinmarketcap ranks of top 10 cryptocurrencies

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USDT supply increases approx 1.6 billion in last a few days

There is no doubt that the market is critically volatile now. It may crash further. Many investors might be hedging position by selling Bitcoin to USDT. So, USDT demand has increased suddenly. It is always demand-supply game for the stablecoins. More demand ensures more printing. There is also a positive side of this. For many investors, USDT like stablecoins are medium to enter into the market as they convert fiat to USDT. Eventually, USDT is used to buy Bitcoin or other cryptocurrency. Ultimately it expands the market. That is the reason, Bitcoin price and USDT supply has very high positive correlation.

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Image Source – popular stablecoin marketcaps

USDT’s most of the supply (approximate $4.3 billion) is on the Ethereum blockchain. $700 million USDT is in circulation on Tron blockchain and there are $1.5 billion on Omni. The rest tokens are spread across various other blockchains. There has been numerous controversies with stablecoins in the past regarding their asset backing. But it seems that investors are unfazed with that. Will such huge Tether printing bring a Bitcoin bull run again as it brought many times earlier?

 

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paragism
paragism

Cypherpunk. Writing content which I love. Creeping on the blockchain. Twitter: @paragism


paragism
paragism

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