Tether Inflow Hit An 8-Month High: How Might This Affect The Price Of Bitcoin?
Tether has been on a wave of luck over the
Tether has been on a wave of luck over the past few months, posting new all-time highs in main market metrics. How can this affect the price of Bitcoin?
“Star time” for Tether
Despite skepticism from some traders, the stablecoin Tether has shown gains in main market metrics. As of July 29, Tether (USDT) inflows soared to an 8-month high, according to a Glassnode report. Crypto analysts agree that the growth of this indicator is directly related to the breakthrough of the psychological barrier of $10,000, which Bitcoin made on June 26.
The crypto community has repeatedly raised the issue of an inverse correlation between the arrival of Tether on exchanges and the price dynamics of the flagship cryptocurrency. We have already observed a similar scenario after Black Thursday on March 12: against the background of an increase in Tether on exchanges, Bitcoin price has gradually stabilized. Analysts are confident that the current growth in the percentage USDT on trading floors should be regarded as a bullish signal for the Bitcoin price movement.
This is not the only victory for Tether in recent years. The stablecoin’s market capitalization rose to $10 billion. Tether was able to confidently take the 3rd place in the top ten cryptocurrencies by market capitalization and left behind a strong competitor Ripple (XRP).
If we look at today’s graph of CoinMarketCap, we can see that the difference between Tether and XRP are relatively minor. Considering the trading activity of Tether holders, the fight for the 3rd place in this rating may continue.
The BTC/USDT pair continues to dominate the monthly trading volume of major crypto exchanges. Trading activity peaked in March 2020 and despite a slight pullback, USDT continues to be the leader among other stablecoins.
Given the record low volatility in Bitcoin over the past two months, experts from Messari have made promising predictions for Tether. In their opinion, USDT has a strong chance of overtaking Bitcoin in terms of monthly transactions shortly. This is primarily due to the growing popularity of the Ethereum network, which accounts for about 60% of USDT supplies.
Maybe this is not a bullish signal?
Not all cryptanalysts support optimistic forecasts for Bitcoin price growth as a result of USDT reaching new market heights. Despite the increase in demand for Tether, the stablecoin continues to lag behind Bitcoin and other cryptocurrencies.
In particular, CryptoCompare analyst James Lee believes that it is too early to talk about the positive impact of USDT inflows on the price of Bitcoin. He noted:
“The exchange inflow of USDT is an unpredictable metric since its growth was previously accompanied by both a fall and a surge in the price of Bitcoin. The last rise in the price of Bitcoin was after the collapse in March 2020; as of today, we do not observe any such crises. “