USDT, a stablecoin pegged to the U.S. dollar, is nearing its all-time high market cap of $82.9 billion, despite lackluster trade volume and price movements in the cryptocurrency market. One possible reason for its increase is Binance’s promotion of TUSD as an alternative to BUSD, causing traders to move towards other stablecoins like USDT. However, data does not show a significant increase in USDT market share compared to other stablecoins in recent months. Another explanation for USDT’s rising market cap could involve the Tron network, where $46 billion worth of USDT is issued, compared to just $36 billion on Ethereum. Most of the USDT issued on Tron belongs to offshore exchanges, suggesting that market makers and whales prefer Tron for its low transaction fees.
In contrast to USDT, USDC’s market cap correlates with trade volume. As USDC trade volume grows, its market cap increases similarly, and vice versa. USDT’s market cap, however, has little correlation with trade volume, despite its primary use case for trading.
Large movements of USDT in the cryptocurrency market raise questions about overall market stability. Whale Alert on Twitter reported several substantial transfers, including 50 million USDT transferred from JustLendDAO to an unknown wallet, and 60 million USDT transferred from Kraken and Tether Treasury to Bitfinex, one of the largest cryptocurrency exchanges. These transfers could be related to significant trading or investment activity, potentially impacting the market’s overall stability and leading to a surge or decline in cryptocurrency prices.
About the author - J-S Tremblay
I've been involved in the cryptocurrency world since 2016 and trading since 2019. I started Moon and Lambo in 2021. I'm passionate about crypto and love to share my knowledge. I hate bankers and I hope that cryptocurrency will change the financial world for the better. View full profile...
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