Bitcoin Price is Bullish as 5% of its Market Capitalization is in Tether (USDT)

Up-to five percent of Bitcoin market cap is held in the most capitalized stable coin in the crypto scene, USDT.

Advertisement


US Dollar Tether, USDT, is many things.

It is a sentiment indicator which is closely watched when cryptocurrency—and especially Bitcoin, peaks or bottoms.

The coin is also a safe haven. For simple reasons:

Tether is the most liquid, and this depth means it is supported by most cryptocurrency exchanges. Besides, the coin is a supported by many protocols.

Advertisement

Crypto Rocket

Tether is mined on Several Protocols

One of them is Ethereum. Previously, it was Omni. But the general diversification is bullish on many angles.

With Ethereum, USDT can be stored as an ERC-20 token. And it has been massive for Ethereum as it became the most active, revealing how active it is in the trading and investment circles.

Other than Vitalik’s project, USDT can be churned in Tron, Algorand, Omni, and most recently Bitcoin Cash.

In fact, some few days ago, 4.1 million USDT tokens were generated on the Bitcoin Cash token system. These are perhaps the first of its kind and another milestone for Bitcoin Cash.

The system recently halved and the resulting miner exodus has been disastrous for the security of the network.

5% of Bitcoin Market Cap is in USDT, this is Bullish

News that five percent of Bitcoin’s market cap is tied in USDT is both bullish and exciting for the token’s creators.

This highlights how first mover advantage is key and how USDT’s role cannot be brushed off despite recent scandals. There has been no independent report on USDT audit.

Last year, it was revealed that USDT is not backed one-to-one with USD but an array of other liquid assets including cryptocurrencies. USDT, the finding revealed, is backed 74% with USD. A spoiler.

However, USDT’s role in Bitcoin and its rising market cap reveals that the crypto community don’t care about Tether Limited’s scandal. Tether Limited is the official issuer of USDT and the company is closely affiliated with Bitfinex, a leading cryptocurrency exchange.

At the time of going to press, USDT has a market cap of $4 billion. But because it is estimated that 30 percent of Bitcoin total supply is static, the influence of USDT on prices is big.

Tether USDT Market Capitalization
Tether USDT Market Capitalization

USDT, as mentioned previously, is a conduit into the cryptocurrency scene. And if 5% of market cap is stored in Tether, it is only natural to expect most of these holders to funnel their hard-earned tokenized cash into the most trusted and liquid digital asset.

Bitcoin is the likely candidate but that also means USDT may be converted to Ethereum (ETH), Litecoin (LTC), and other leading and established blockchain projects.

Tether (USDT) minting Questioned

A few hours ago, 120 million USDT were minted by the Tether Treasury.

Tether Treasury Mints 120 million
Tether Treasury Mints 120 million

This was captured by Whale Alert, a dedicated portal that monitors whale transactions.

This amount, however, was not for use but for Treasury inventory replenishment.

“PSA: 120M USDt inventory replenish. Note this is an authorized but not issued transaction, meaning that this amount will be used as inventory for next period issuance requests.”

Nonetheless, there are critics who are concerned by the arbitrary printing of USDT. In their view the continuous printing, regardless of whether it is authorized or not, is another reason to hold Bitcoin.

“At this point Bitcoin finite supply doesn’t even matter, when you have an entity that can print money like in GTA San Andreas with cheat codes. Don’t sell your Bitcoin for this supposed stable coin… if you sell chose PAX, DAI, and USDC.”

Summary

Bitcoin Price is Bullish as 5% of its Market Capitalization is in Tether (USDT)

Article Name

Bitcoin Price is Bullish as 5% of its Market Capitalization is in Tether (USDT)

Description

Five percent of Bitcoin(BTC) market cap is in Tether (USDT). This is bullish for crypto holders a few days before a decisive halving.

Author

Dalmas Ngetich

Publisher Name

CoinGape

Publisher Logo

Binance Futures Limited Offer: Use this link to register & get 10% discount on fees.

Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.

Disclaimer
The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.



Share on Facebook



Share on Twitter



Share on Linkedin



Share on Telegram