Tether may not be This Bitcoin Bullrun’s Catalyst After all

BlocDesk Tether USDT Exchange Withdrawals Active USDT Addresses

Every time the Bitcoin price goes through a bullish period, certain rumors will persist. To a lot of people, the influence of Tether’s USDT is always a concern. However, statistics show things are not as clear cut as they may seem at first. 

The Current Tether Situation

When looking at the overall supply of USDT, it is not hard to see why these rumors persist. The supply has exploded in 2020, despite a massive Bitcoin price dip earlier in the year. Since that time, the value of BTC has increased by nearly $10,0000 again. It is plausible to assume Tether plays a role in all of this. However, things are not always as simple either. 

Glancing at the data provided by CryptoCompare, an interesting situation becomes apparent. It is certainly true that USDT has ample trading volume most of the time. In the past two weeks, it has seen numerous peaks above 2.5 billion in daily volume, In some cases, it even spikes to 4.5 billion. Significant amounts that can offer a hint as to why the value of Bitcoin is going up again. 

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Blocdesk USDT Volume 2W
Source: CryptoCompare

However, the actual large transactions made through Tether are on the decline. It is only a minor difference, but it shows USDT isn’t just used by the whales either. Granted, it is certainly possible to buy smaller amounts of BTC with Tether. However, it is not moving the market in any significant manner, at least where large-size transactions are concerned. 

Blocdesk USDT Correlation
Source: IntoTheBlock

Last but not least, it is crucial to see where the USDT volume comes from. As it turns out, the top trading pairs are USD, HUSD, TRY, QC, and EUR. One obviously missing component: Bitcoin. According to IntoTheBlock, the USDT price correlation with Bitcon sits at just 0.05. Not a convincing case by any stretch of the imagination. 

What about Bitcoin?

When looking at the other part of the equation, more interesting details come to light. Bitcoin’s volume in the past two weeks hasn’t been exceptional by any means. In fact, it seems to be slowing down a bit in the past few days. What that means for the price, is difficult to predict. 

In terms of actual volume by currency, Bitcoin is primarily traded against Tether. That volume is 4 times higher compared to BTC/USD.  However, it represents under $2.73 billion in the past 24 hours, whereas Bitcoin’s overall volume is much higher. Other prominent pairs include BTC/JPY, BTC/EUR, and BTC/CNYT. 

Source: CryptoCompare

Keeping all of the above in mind, a very interesting scenario exists. While it seems as if USDT and BTC are the main actors in this space, they clearly are not. Tether remains the top trading market from the Bitcoin side of the perspective. 

However, the actual “inflow” of new currency into USDT tells a completely different tale. As such, it is primarily pre-existing USDT being used to trade Bitcoin. The concerns regarding “money printing” seem unwarranted, albeit there may be more going on behind the scenes than meets the eye.