Tether USDT shoots to third place, passing XRP to become a top-three cryptocurrency. The event took place moments before the Bitcoin halving.
With a market capitalization of $8.79 billion, USDT market is now larger than that of XRP which has a market cap of approximately $8.6 billion. The increase in the supply of USDT is cited as one of major factors that led to the rise in value of the USDT market. Significant inflows of the coin into exchanges in recent weeks have also been pointed to as a reason for the rise in the coin’s valuation.
According to the marketing and social media director at cryptocurrency data provider Brian Quinlivan,
“Most USDT isn’t just being taken off exchanges to be stored in wallets or cashed out through a FIAT-based platform like Coinbase. When people aren’t using USDT, they most often put it in Bitcoin. And what’s cool is the fact that this USDT percentage often fluctuates a few hours or days in advance of BTC’s price reacting to it. So monitoring this metric in advance can end up producing a tremendous advantage by catching a sudden fluctuation early enough.”
Reports suggest that an increasing proportion of sideline investors are using stablecoins to keep one foot in the market and one foot out. With greater prospects of profits on the horizon, more could convert their stablecoins for Bitcoin as a price increase is anticipated.
Accordidng to Messari CEO Ryan Selkis,
“There’s now $3 billion of stablecoins sitting on exchanges. If investors wanted to cash out of crypto completely, they would have withdrawn funds to banks. Instead, we’ve got more dry powder held in the crypto economy than ever before. In both real and market cap percentage terms.”
Despite scepticism about its underlying assets and minting process, USDT remains the most popular stablecoin, with strong demand across Asian regions.
