Injecting liquidity in the form of USDT (Tethers) into the market is a trend that continues into the new year. A new tranche of 100 million USDT has already hit the markets, with most Tethers reserved for Bittrex, but showing up on smaller platforms, and affecting exchanges from Binance to Cryptopia.
The additional credit-based liquidity may be boosting the nominal prices of cryptocurrencies in their latest upward run. However, the biggest problem that USDT is posing is the inability to cash out to fiat on demand. For Bitcoin traders, this means that when taking a fiat position, their funds are in fact in USDT, a token almost useless outside the exchange ecosystem.
The heightened interest of new buyers has also caused Bittrex and Bitfinex to put a stop on new registrations. Even Binance has flirted with an optional invitation code, at least for now.
While Tethers have been paired with DASH and Litecoin, their main effect is on the price of BTC. For now, smaller markets do not allow margin trading. However, recently Bitfinex stated it is possible that smaller digital assets like Golem (GNT) and Status (SNT) could possibly see their own margin trading markets.
The latest market moves made Bitcoin's price recover above $15,000. But the total USDT in circulation has risen to nearly 1.5 billion, and daily turnovers see the amount traded twice in 24 hours, for a total volume of around $3 billion.
The USDT is once again the driving factor, even ahead of trading volumes against the Korean Won.
At the moment, some altcoins are taking the position of Tethers in trading against Bitcoin. The Tether trading has in fact shrank from around 7% to 4.5% in the past 24 hours, as money now moves between BTC and altcoins, which are on the move again.