A surge in USDT Supply on Crypto Exchanges
The most widely used stablecoin in the world is called Tether (USDT), and it has been released on many blockchains over time. The Omni blockchain hosts the most widely used version of USDT, although it has also been released on Ethereum and Tron under the names USDT-TRX and TRX-USDT.
A growing number of cryptocurrency organizations, including Tether and Circle, are expressing support for the new Proof of Stake mechanism on the Ethereum network with just over a month left until Merge is adopted.
In just three months, the USDT supply ratio on cryptocurrency exchanges experienced a dramatic increase. Between May and late July, the space tracked this evolution during two crucial phases of the cryptocurrency markets. Moments like the time of the Crypto Winter’s coldest touch and the market’s sluggish comeback. Consequently, the rise in the percentage of USDT supply on exchanges communicates two crucial signals.
The Current Tether Supply Ratio
Since May, the ratio of the entire supply of USDT on exchanges has more than doubled. On May 9, the percentage in the neighborhood was 19.7%, but it has now risen to 42%. The graph also reveals a rise that was specifically documented around the time the markets fell in June. This can be a sign of investor capitulation or a decision to buy the drop. The increase might be a sign that institutional and ordinary investors want to get into the markets now that a recovery is in the offing.
The daily trading volume of Tether is a little under 50% of that of Bitcoin. There is a lot of proof that most of that is wash trading. If so, then uninstalling Tether will inevitably result in another crash. The genuine demand for Bitcoin, in my opinion, is far less than what the current trade volume would indicate.
Tether’s main goal is to provide liquidity and a buffer against market volatility. The tokens are locked to a currency, thus there shouldn’t be any value loss or fluctuation like there would be with other tokens.
Because of two things, Tether (USDT) continues to remain pegged to the US dollar: For every USDT deposited, Bitfinex awards users’ accounts with 1 USD. Arbitrageurs bring the USDT-USD value back into sync when it deviates significantly from $1.
Conclusion
In the world of cryptocurrencies, Tether is without a doubt the most well-known stablecoin. Its main goals are to provide the freedom of blockchain technology and the stability of the U.S. dollar. USDT should be kept in a secure location. Tether was initially released using the Omni Layer protocol. Since USDT switched over to the Ethereum blockchain last year, Tether is now an ERC20 compliant coin.
You can access the official Tether wallet on their website, although many people do not recommend it because it was hacked in 2017 and lost $31 million worth of Tether. Even so, this is the main method for converting USDT into actual US Dollars and vice versa. Tether stopped accepting new registrations following the attack and pulled the wallet offline. The problem is that there are never any assurances that your money is secure, not even in the case of a coin’s official wallet.
