Tether, the top stablecoin, has fought back recent losses to hit 2-month highs as anticipation over this year’s market surge drives digital assets further higher. USDT saw its market value rise 3.8% from a low of $65.3 billion on November 27 to $67.8 billion on Sunday, its most incredible level since the collapse of FTX pushed the market downward.
The market widely uses Tether, which is pegged one-to-one with the US dollar, beating rivals USDC and Binance’s BUSD. According to data produced by NYDIG during the preceding 30 days, USDT has facilitated more than $980 billion in exchange trading volume, compared to $323 billion for BUSD and $135 billion for USDC.
Tether Supply Boost Predicts Crypto Price Hike
Based on previous events, the IT and financial services corporation see a rise in stablecoin supply as evidence of increased money flow into the market and a favorable indicator.
We believe that the continuous expansion of Tether supply is a bullish indication for the continuation of the price surge, the firm stated in a Friday report.
The increase in supply parallels the rebound of 2019, which was another rally for bitcoin. It rose from $3,250 to over $13,000 before declining in the latter part of the year.
Stablecoin supply rose 100% from Aug 2020-Jan to 2021 before the latest bull run. This paralleled a 130% gain in the price of bitcoin. Though not everyone is persuaded, the rise in USDT supply is strongly tied.
William Fong, Treasurer at Australian trading firm Zerocap said.
We have noticed an increase in interest in digital asset accumulation as well as transaction flows in stablecoins recently,” However, we cannot be certain if it is directly tied to the USDT supply movement or is merely a risk adjustment on macroeconomic developments.
The many central bank policy meetings this week, including a potential decrease in the rate of tightening from the US Federal Reserve, are more likely triggers, according to Fong.
BUSD, the industry’s 3rd largest stablecoin, has struggled to stay up. Instead, Binance’s stablecoin supply has dropped 27% from $21.8 billion on December 13 to $15.7 billion.
Withdrawals from the native exchange and trader exit through pairings increased pressure on BUSD in mid-December. A broad reduction in trust in the Binance brand following Mazer’s decision to stop monitoring the exchange’s assets further exacerbated the stablecoin’s collapse in the fourth quarter of last year.