Tether’s USDT remains the dominant stablecoin in the cryptocurrency industry. Even this asset goes through dry spells, though. With a one-month low in exchange outflow volume and transaction volume, an exciting situation becomes apparent.
Where Are The USDT Going?
For years now, there have been rumors about how Tether might issue more USDT when the Bitcoin price goes down. Although these claims have not been proven in an official capacity, no one will deny the popularity of this stablecoin. It has the largest market cap by a landslide and often notes substantial increases in its circulating supply. Putting one and one together can lead to some unusual speculation.
What is apparent today, however, is how Tether’s transaction volume is decreasing rapidly. A surprising change, as it comes after a high of nearly 450 million USDT per day. This trend broke off two days ago, culminating in a one-month low of roughly 200 million USDT. No one can explain this sudden difference, as the Bitcoin price has only trended higher in the past few days.
Keeping this decrease in mind, it may not be too surprising to see all significant cryptocurrencies running out of steam a bit. Bitcoin has tried to break $50,000 and is now trading almost $2,000 lower. Ethereum is dropping quickly as well, rather than benefiting from Bitcoin’s momentum. It appears the bull run may be on life support, at least in the USDT department.
That still doesn’t validate any claims of how Tether is pumping the prices higher by issuing more stablecoin assets, though. There are often visual correlations between USDT and Bitcoin or Ethereum, but the deeper meaning remains unclear. Additionally, the current stablecoin volume by Tether is on par with that of early January 2021. It is not an immediate reason for concern, yet still an intriguing development.
Hoarding USDT On Exchanges?
Although the USDT transaction volume isn’t looking too hot, the use of this stablecoin isn’t necessarily diminishing. The exchange outflow for this asset is also at a one-month low, indicating traders seem more intent on hoarding this stablecoin in their exchange wallet. What that means for future price developments is anyone’s guess.
Currently, over 31 million USDT is withdrawn from exchanges per day. A minor amount considering Tether’s massive market capitalization. A vital sign of how this asset is hoarded on exchanges right now, potentially leading to more price volatility. With the current prices going up and down regularly, it becomes straightforward to scalp for profits.
These statistics create an environment for competing stablecoins to make a bigger impact on the cryptocurrency industry. Which stablecoins will rise up and pose a challenge to USDT remains a mystery for the time being. There is ample room for competition in this space but taking away market share from the “top dog” is always challenging.