Tether (USDT) Primes Markets for Rally With New Liquidity Injections
The Tether Treasury is down to 132 million coins, after moving assets to some of the most active Asian exchanges.
The Tether treasury is getting emptied out, injecting another 40 million Tether (USDT) in the past week, whittling down the reserves to 132 million coins. But this time, the coins are not moving into the Bitfinex exchange, which has almost purged its wallet of USDT.
The Bitfinex wallet has fallen to about 4.3 million USDT, down from around 22 million in the past few days. Most of the coins are moving into OKEx, Huobi, and Bittrex. Binance is also still holding the largest storage of USDT coins.
If the Treasury runs out, it is possible that new USDT are minted. The increased liquidity could possibly boost Bitcoin (BTC) prices for another significant rally. In the past, the presence of USDT in the crypto trading ecosystem was seen as one of the bigger risks for achieving a real valuation for BTC and altcoins. The minting of USDT can now also happen as a form of credit, without real fiat backing.
The circulation of USDT has accelerated, with each coin turning over more than four times in 24 hours. During peak times, the entire supply of USDT was traded 11 times in 24 hours. At this point, it is difficult to estimate which parts of this volume are organic, and which ones are organized and lead to unsustainable pumps.
Recently, Weiss Ratings published another analysis on the risks of USDT usage. The asset is gaining speed as it helps route funds for arbitrage trading.
“The consequences could be far-reaching. What happens if Tether does turn out to be shaky? Or what happens if a major government determines that cryptocurrencies like Tether are being used by exchanges to avoid regulations? What if this large source of liquidity suddenly evaporates,” Weiss Ratings commented.
BTC market prices are inching upward, although the main asset is still not given a green light for a rally. BTC traded at $5,306.95 as of 8:45 UTC on Monday, sustaining the price levels gained over the weekend. BTC has more or less stalled, while altcoins are staging rallies both in dollar terms and against BTC.