USDT’s appeal relative to other stablecoins will likely diminish as regulations will require more transparency and compliance with new anti-money laundering standards, the report said.
Diversifying Stability: Stablecoins Finding Home Beyond the Greenback
Following the success of Tether and USDC, a generation of stablecoins are offering new features for investors and holders, says Scott Sunshine, Managing Partner of Blue Dot Advisors.
Stablecoin Tether’s Increasing Dominance Is Bad for Crypto Markets, JPMorgan Says
Other stablecoins such as USD Coin may benefit from the coming regulatory crackdown and gain market share, the report said.
Expert Analysis: Bitcoin ‘Bottom Is Not In’, Potential $30K Retest On The Horizon
Bitcoin (BTC), the largest cryptocurrency by market capitalization, closed January above the $40,000 threshold, signaling positive price action. However, market expert Justin Bennett suggests that Bitcoin’s bottom has yet to be reached.
Bennett’s analysis highlights the possibility of further price declines, with Tether’s stablecoin USDT dominance (USDT.D) chart indicating potential downward movements.
Tether Dominance Signals Concerns For BTC’s Price
Bitcoin’s recent price recovery and ability to surpass the $40,000 level have provided optimism among investors. Nevertheless, Bennett believes further price declines could follow a retest of the mid $44,000 range.
Bennett highlights the inverse relationship between Tether dominance and Bitcoin. According to his analysis, the levels on the Tether dominance chart since October have been reliable indicators for Bitcoin’s price movements.
According to Bennett’s analysis, as depicted in the chart above, Tether’s dominance may experience a potential increase from its current level of 6%. This increase could bring it closer to the 8% mark.
In such a scenario, Bitcoin’s performance would likely move in the opposite direction, indicating potential price declines soon.
On January 25, Bennett suggested that Bitcoin could drop another 20% from its current levels, which would place it around $30,000. If this scenario plays out, it would be crucial for Bitcoin bulls to defend the $30,000 level to maintain the current bullish structure.
A drop below $29,000 would give bears a stronger position, with only three major support lines remaining at $28,400, $25,900, and $24,000 before a potential retest of the $20,000 mark.
The performance of these support levels and Bitcoin’s ability to withstand increased selling pressure will be key factors to monitor. The future market sentiment will also play a significant role in determining Bitcoin’s price trajectory.
Bitcoin Witnesses Stellar Accumulation Trend
Despite the possibility of further price drops, renowned crypto analyst Ali Martinez has shed light on a notable trend in BTC’s recent accumulation streak by investors.
According to Ali Martinez’s analysis, Bitcoin is experiencing a significant accumulation streak, rivaling some of the most notable periods observed over the past few years.
The Accumulation Trend Score, a metric that gauges the buying activity of larger entities, has remained consistently high, hovering near 1 for the past four months.
This suggests that influential market participants are actively accumulating Bitcoin, signaling their confidence in the long-term potential of the cryptocurrency.
Martinez’s observations further indicate that Bitcoin’s price range around $42,560 has emerged as a highly significant interest zone.
Within this range, an impressive total of 912,626 BTC has been transacted. This is expected to be a significant support level, potentially preventing further downside movements and fostering increased buying interest.
These trends collectively contribute to a positive market outlook, suggesting that despite potential price drops, Bitcoin remains an attractive asset for long-term investment.
Featured image from Shutterstock, chart from TradingView.com
Stablecoins Surge: USDT Leads $400 Million Inflows, Signaling Investor Confidence
The cryptocurrency industry has witnessed a significant change in the movement of stablecoins, offering valuable observations into the evolving dynamics of the market. Recent data from IntoTheBlock and CryptoQuant has shown a surge in stablecoin inflows into exchanges, reaching record highs in January.
Notable inflows were observed on January 2nd ($478 million), January 3rd ($489 million), and January 26th ($673 million). However, this trend has since reversed, with outflows dominating the market.
On January 30th, there was a substantial outflow of $412 million, marking the second-highest daily outflow recorded in the month, following the $541 million outflow on January 19th.
USDT Leads Stablecoin Rally, But Caution Persists In Crypto Market
An analysis of the 24-hour trading volume of the top stablecoins on CoinMarketCap reveals that Tether (USDT) and USD Coin (USDC) collectively accounted for approximately 90% of the total volume. Tether, in particular, has been dominant in terms of flows, with a 24-hour trading volume exceeding $42 billion, while USDC’s volume stood at around $6 billion.
Taking a closer look at the flow of USDT through CryptoQuant, it was found that there was a substantial inflow of $373 million on January 26th, followed by a prevailing trend of outflows, with over $83.4 million observed at the time of writing.
Experts suggest that the rise in stablecoin inflows onto exchanges, particularly the $478 million on January 2nd, could indicate traders’ and investors’ readiness to participate in the market or their desire to safeguard their funds during uncertain times.
Conversely, the shift towards outflows may signal caution or preparation for potential market volatility. Additionally, the substantial inflow of stablecoins, especially USDT, could indicate increased buying power and intentions to establish positions in the cryptocurrency space.
Stablecoins Surge, Signal Investor Preparation
The increase in stablecoin inflows onto exchanges can be interpreted in two ways. Firstly, it may indicate that investors and traders are preparing to enter the market. By moving their funds into stablecoins, they can quickly transition into other cryptocurrencies when they perceive favorable opportunities. This suggests a readiness to participate and take advantage of potential market movements.
Secondly, the rise in stablecoin inflows may also reflect a desire to keep funds in a secure manner, particularly during uncertain times. Stablecoins offer stability by being pegged to a specific asset, such as the US dollar, which can be appealing to investors seeking to protect their capital in times of market volatility. This cautious approach can be seen as a way to safeguard funds and mitigate risks in an unpredictable market.
Tether Records Nearly $3 Billion Profit
Meanwhile, Tether announced a “record-breaking” $2.85 billion in quarterly profits as the market capitalization of its main token, USDT, approached $100 billion.
According to a blog post by Tether, the interest gained on the company’s enormous holdings in US Treasury, reverse repo, and money market funds—which support the USDT stablecoin—account for around $1 billion of the earnings in the most recent quarterly attestation report that was released on Wednesday. Everything else was “mainly” due to the growth of Tether’s other assets, like gold and bitcoin (BTC), the stablecoin issuer said.
Featured image from Wccftech, chart from TradingView
Tether Reports Record $2.85B Profit as Biggest Stablecoin Nears $100B Market Cap
The USDT stablecoin issuer held over $5.4 billion in excess reserves as of 2023 year-end, according to its latest attestation.
Bitcoin Accumulation: USDT Issuer Tether Goes On Massive 8,888 BTC Buying Spree
In an encouraging development for the crypto space, Tether, the issuer of the world’s largest stablecoin USDT, has doubled down on its Bitcoin investment momentum by acquiring a staggering 8,888 BTC, further diversifying its portfolio.
Tether Increases Its Bitcoin Holdings
Tether has recently made its third largest Bitcoin purchase, as the stablecoin issuer added a total of 8,888 BTC valued at $380 million at the time of purchase. This brings its total BTC holdings to 66,465 BTC, valued at $2.81 billion with an average buy price of $42,353.
This transaction was captured by BitInfoCharts data, which also showed the previous amounts of BTC accumulated by the blockchain-enabled platform. This recent purchase follows Tether’s Bitcoin investment strategy, in line with its vision to continuously strengthen its reserves by accumulating Bitcoin.
Earlier in May 2023, the stablecoin issuer announced in a blog post that it would regularly allocate 15% of its net realized operating profits toward increasing its BTC reserves. As of the end of March 2023, Tether held approximately $1.5 billion worth of cryptocurrency, a $1.3 billion difference from its total BTC holdings presently.
According to reports from Dune Analytics, Tether has become the 11th largest Bitcoin holder, with Microstrategy, an American business intelligence service, surpassing Tether’s holdings with over 189,00 BTC accumulated. The other addresses in the top 10 rankings are owned by major crypto exchanges and governments, including Binance, Bitfinex and the US government.
Tether’s decision to double down on its Bitcoin investments signals its confidence in the cryptocurrency’s future trajectory. It also underscores the blockchain platform’s belief in the long-term potential of BTC as it aims to capitalize on Bitcoin’s potential growth by bolstering and diversifying its digital asset reserve.
BTC Accumulation Race Amidst ETF Hype
Tether’s strategic Bitcoin purchase comes at a time when the crypto market is buzzing with excitement over Spot Bitcoin ETFs. Before the approval of Spot Bitcoin ETFs, Tether had steadily increased its BTC portfolio, purchasing substantial quantities of BTC consistently. In March 2023, the stablecoin issuer bought 15,915 BTC and another 4,083 BTC between the months of May and September.
The timing of Tether’s BTC purchase suggests a proactive stance towards potentially seizing the opportunities brought forth by the Spot Bitcoin ETF market and the upcoming Bitcoin halving in April.
In addition to Tether’s large-scale BTC acquisition, Microstrategy is also another major player which has been continually increasing its BTC holdings. The business intelligence software company added a whopping 14,620 BTC to its portfolio in December 2023. At the time, the value of the purchase was about $615.7 million.
Other companies with large BTC holdings include Galaxy Digital and Elon Musk’s Tesla, as well as space exploration company SpaceX.
In Search of Financial Freedom: The Answer Lies With Bitcoin, Not Stablecoins
Tether Reportedly Bought 8.9K Bitcoin for $380M, Remaining 11th-Largest BTC Holder
The stablecoin issuer announced in May 2023 that it would start buying bitcoin in an effort to diversify the backing of its USDT stablecoin.
Does Howard Lutnick Know ‘the Truth’ About Tether?
Speaking at Davos, the Cantor Fitzgerald CEO says the stablecoin issuer has the money to back USDT. Maybe it’s time we all started to believe in Tether, despite the “truthers”?
Big Wall Street CEO Addresses Controversy Around Tether’s Stablecoin Assets: ‘They Have the Money’
Cantor Fitzgerald CEO Howard Lutnick vouched for stablecoin issuer Tether’s legitimacy on Tuesday, addressing what has been one of the big questions in crypto over the years as its stablecoin, USDT, has grown into a behemoth: Does Tether have the money it says it does.
Tether Hits Back at UN Report Alleging Role of USDT in Illicit Activity in East Asia
Tether, the issuer of the largest stablecoin by market cap, has challenged the United Nations (UN) for its report on underground banking and money laundering infrastructure in East and Southeast Asia.
Stablecoin Takeover? Record Tether 71% Dominance Raises Questions About Crypto Future
Tether, the issuer of the ubiquitous USDT stablecoin, cemented its dominance in 2023, ballooning its market share to a staggering 71%. This explosive growth, however, comes with a chilling undercurrent: a United Nations report linking USDT to a surge in cybercrime and money laundering in Southeast Asia.
Glassnode data paints a stark picture of Tether’s ascent. Its market capitalization reached a record $95 billion in January 2024, fueled by a 40% increase in USDT supply over the past year. Meanwhile, competitors like Circle’s USDC saw their market share shrink, with USDT now commanding over 7 times the circulation of its nearest rival.
Tether Market Dominance Soars
Paolo Ardoino, Tether’s new CEO, has prioritized cooperation with U.S. law enforcement. The company boasts of freezing wallets linked to sanctions lists and recovering over $435 million in illicit funds.
However, the UN report casts a shadow on these efforts, detailing how USDT facilitates “sextortion,” “pig butchering” scams, and underground banking across Asia.
While Tether has proactively banned over 1,260 addresses linked to criminal activity, the sheer volume of illicit transactions raises concerns about the effectiveness of these measures.
Critics point to Tether’s opaque reserve backing as a breeding ground for misuse, calling for greater transparency to combat money laundering.
Tether’s Reign At Risk: Regulatory Challenges
The stablecoin market, once touted as a bridge between traditional finance and the crypto world, now faces a reckoning. Tether’s dominance is undeniable, but its association with criminal activity threatens to erode trust and trigger stricter regulations.
Meanwhile, Circle’s recent IPO filing hints at a potential shift in the landscape. With regulatory scrutiny intensifying, Tether’s future hinges on its ability to address concerns about transparency and combat illicit activity.
Can it clean up its act and maintain its crown, or will the tide turn towards its more transparent rivals? Only time will tell if Tether’s reign as the king of stablecoins will weather the storm of controversy.
With its historic 71% market share, Tether’s reign over the stablecoin realm is undeniable. Yet, the shadow of illicit activity threatens to eclipse its success.
As regulators sharpen their focus and competitors like Circle step into the ring, the question looms: will Tether clean house and retain its crown, or will this be the tipping point for a stablecoin revolution, reshaping the future of crypto itself?
Only time will tell if Tether’s dominance signals a bright new era for digital currencies or serves as a cautionary tale, paving the way for a more transparent and accountable crypto landscape. The gloves are off, and the fight for the future of stablecoins is just beginning.
Featured image from Shutterstock
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