Tether’s market cap has been gradually increasing over the past few weeks, and over the weekend Tether printed a fresh batch of $100 million USDT. Just 2 weeks ago, Tether printed a further $150 million worth of USDT and since then markets have seen huge price rises and mega selloffs. If this is anything to go by, we could be in for a rather exciting July as USDT is used to pump and dump the price of Bitcoin.
The Tether Machine Keeps on Printing
Back on April 4th, the USDT market cap was a rather cool $2 billion. Fast forward 3 months and USDT is now sat with a market cap of $3.5 billion, meaning the Tether printing presses has been running hot since the bullish market emerged. Around the same time USDT’s market cap started to increase, so too did the price of Bitcoin – rising more than $1,000 in a few hours.
Trade Volume is Breaking New Records
Whether it’s the news that Chinese investors should look at Bitcoin as a safe haven asset, or just the retracement in the Bitcoin market – something is driving the USDT trade volume. On June 27th we saw it break its all-time high and smash its way to $42.6 billion in trade volume. This was higher than the previous all-time high by a cool $9.8 billion. The huge Bitcoin selloff and retracement could very well be the culprit of this massive trade volume. If so, it’s an encouraging sign that traders are flocking to stablecoins rather than cashing out completely. It means that investors know Bitcoin will bottom out soon enough and the price will slowly start to rise again.
Why Are People Trusting Tether?
Somehow, Tether has managed to hold on to its crown as the king of the stablecoins; even after enduring mountains of controversy. Earlier this year, we saw Tether changing the wording in its terms and conditions to say that USDT is not 100% backed by fiat. Instead, it’s backed by fiat and a basket of other cryptocurrencies. It’s still unclear how this works, especially as the price of cryptocurrencies Tether is pegged against could fall in value – thus making the value of USDT fall too.
This new batch of Tether being released into the wild means that investors and traders are still interested in Tether and its advantages. Hopefully, we will see investors swapping their USDT for Bitcoin and other cryptos in the coming weeks – this selloff is becoming too painful to watch!