The supply of USDT in Crypto exchange platforms such as Binance and Huobi is on the rise. This is according to a report by Santiment, which shows that more Tether coins are transacted in the Crypto market.
In comparison, the supply of BTC is plummeting at a meteoric pace, and the level is at a 4-year low. The report shows that investors moved 114,000 BTC tokens from exchanges in the last week alone. Consequently, the circulating supply ratio of BTC fell below the 10% mark. According to analysts, this is a pointer that the sell-off pressures on Bitcoin will decrease, which may shore up the price and hedge against further losses in the ravaging Crypto winter.
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What An Increase in USDT Supply Means
The increasing supply of USDT signals the growth of investor confidence in digital assets. Stablecoins such as Tether are pegged against tangible assets, and their values are not affected by market shocks.
On the other hand, wealth held in fiat currencies can be diminished by economic hazards. These hazards include; inflation, devaluation of currencies, and monetary policies such as increases in lending rates.
These two factors make USDT an ideal option for storing wealth. To ensure that there is equilibrium in the demand and supply dynamics, Tether is opting to increase the supply of the token to maintain the price at its ideal level of $1.
The Crypto Market Is Recovering from The Terra UST Crash
Following the Terra Luna (UST) crash, investor confidence in Stablecoins is being re-established. Tether, for instance, has divested from risky commercial paper instruments deemed risky. This is meant to ensure that an unanticipated unfavorable performance does not compromise the USDT backing.
The mitigation effort to mitigate the fallout from the plunge is bearing positive results and restoring confidence in Stablecoins. However, more effort is needed in marketing algorithmic Stablecoins as they are deemed risky.
Other Stablecoins that are in high demand by investors include; USD Coin (USDC), Binance USD (BUSD), and the Pax Dollar (USDP).
Tether USDT is The Highest Valued Stablecoin
The market capitalization of the USDT is $66,913,905,731 which is the third-largest after Bitcoin and Ethereum. The current price of 0.9990 is 0.77% less than its 24-hour peak of 0.9992. One of the most notable aspects of the circulating supply of the Crypto is the high level. With a total of 66,981,025,012 USDT in supply, the circulation of 49,180,017,601 USDT is 72% compared to Bitcoin’s rate of less than 10%. The high circulation rate shows that the USDT is ideal for transacting and not hodling.
In the meantime, the Crypto bears are still prevailing, and the Crypto market has lost the upward momentum that prevailed on Monday morning.