Tether (USDT) Remains Near Peak Activity

In 2019, new indications surface, suggesting that the influence of the Tether (USDT) stablecoin defines the direction of the markets.

Tether (USDT) is still the best-traded digital asset in the world, holding sway over more than 33% of all exchanges, based on CoinMarketCap data. The USDT activity remains robust even at a moment when Bitcoin (BTC) is taking a breather, and hovering at a lower range of $9,500.

The USDT asset is also once again gaining speed on the Ethereum (ETH) network. In August, the activity of Ethereum-based USDT reached above that of the Omni-based USDT. The Tether smart contract still uses up 20% of all gas on the Ethereum network, down from a recent peak above 35%. But the network load may increase in the future, making USDT a permanent factor for Ethereum’s computational resources.

The behavior of USDT is closely watched, as correlations have been found between increases in USDT supply and BTC price peaks. Currently, the supply of USDT is flat, at 4.043 billion coins. But active printing in April and May coincided with the re-awakening of the BTC rally, taking prices up to $13,800.

As the USDT printing stagnated, so did BTC prices. In the past, Tether has decreased the liquidity by returning 1.3 billion USDT to the Treasury, leading to BTC sinking significantly to lows around $3,200.

At this point, it is unknown what the decision of Tether, Inc. would be, regarding the supply of USDT. Information from Chinese traders suggests there is demand for USDT on specialized OTC markets. Additionally, Tether has shown readiness to launch a yuan-based stablecoin to directly address Chinese demand for digital assets.

Tether, Inc., along with iFinex, is still under investigation by the New York Attorney General. However, the investigation was limited to the companies’ activity in the state of New York, and will not address the principles of printing new USDT, as well as the backing of the coins. Tether, Inc. still carries a large-scale loan to Bitfinex, of which the exchange has claimed to cover $100 million.

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