Tether (USDT) Supply Increases on All Networks Ahead of Possible BTC Rally

More than 3.5 billion coins exist on the Bitcoin OMNI layer, with an additional 100 million minted for Ethereum-based USDT.

Tether (USDT) is on the move, possibly preparing for an extension of the Bitcoin (BTC) bull market. In the past, fast issuances of USDT have been linked to a price climb for BTC, a trend still noticeable in 2019.

The newly minted USDT has entered the markets in the past days, increasing the supply to above 3.5 billion coins. On the Ethereum network, an additional 100 million USDT were minted, taking the entire supply to 900 million.

The efforts to boost the supply of USDT have led to a lower turnover for each coin, down to 400%, meaning each coin was traded four times - as compared to 11 times in 24 hours a few months ago. USDT remains one of the key drivers of the bull market, as it offers liquidity and arbitrage opportunities.

The influence and importance of USDT remain, even though the stablecoin is weighed down by a large loan to Bitfinex, to the tune of $900 million - meaning that USDT is not backed 100% by fiat.

The latest issues of USDT helped boost BTC prices to above $9,000 again, as the new yearly highs above $9,300 were reached in rapid jumps of a few hundred dollars within minutes. Analysts have also linked the behavior of BTC with spikes in activity on Bitfinex, which spill over to other exchanges.

But the more curious development is that BTC prices in dollars and USDT are moving in unison, unlike the past, when the dollar price was usually lower. Now, both prices move close together, with a premium of just $16.

The significant inflow of USDT has the potential to create a spectacular, though risky rally for BTC. In the past, skeptics have warned of a potential USDT collapse. So far, USDT has held up, only briefly falling as low as $0.85 on Kraken. Last fall, supply fell to a low of 2.8 billion coins after Tether withdrew more than 1.3 billion coins from the market. From February 2019, the inflows of USDT started again, accelerating in the past few weeks.

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