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What's happening in the market is booming ...

What is happening in the market – a boom in stablecoins or Tether alone?

  • A number of market participants draw attention to the surge in demand for stablecoins denominated in USD.

  • However, a sharp increase in activity is observed only in the UDST segment.

  • This makes many wonder what is really going on.?

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Recently, many market participants have begun to notice the unusual growth in demand for stablecoins backed by USD. However, it seems that Tether is mainly engaged in the emission of new coins..

Over the past couple of months, there has been a sharp influx of new USDT stablecoins on the crypto market. At the time of this writing, USDT’s asset value was close to $ 7.5 billion, according to the Tether Treasury itself..

“Print USDT as if nobody sees!”

What's happening in the market is booming ...

Such a figure cannot fail to impress. The dynamics of the rapid growth of this indicator for the last month alone is even more impressive..

So, at the end of March, the editorial staff of BeInCrypto reported that the total number of assets denominated in USDT exceeded the round mark of $ 6 billion. Further, on April 19, the market capitalization of Tether has already exceeded $ 7 billion. And now, as of April 24, this figure has already approached to $ 7.5 billion.

We also said a little earlier that in just 25 days, the Tether Treasury issued over $ 1 billion USDT coins, which is equivalent to $ 40 million per day. As a result of simple arithmetic operations, one can also come to the conclusion that in 28 days the volume of emission of new coins amounted to $ 1.5 billion.

This begs the question: where did such an unprecedented demand come from – and does it even exist??

Recently, Coindesk suggested that the market has entered a new stage of “crypto dollarization”. The crisis triggered by the pandemic has led to an increase in demand for stablecoins backed by US dollars. In theory, this could explain why Tether is now running its printing presses to the limit..

Where is the demand for other stablecoins?

However, many facts cannot be fitted to this version. So, for example, Twitter user Jakal (@intel_jakal) in this regard draws attention to the comparative graph of stablecoin emissions. In particular, he is interested in why the indicators of all other coins, with the exception of Tether, remain flat..

It is generally accepted that USDT is massively attracting institutional investors who are looking for reliable protection from volatility in this stablecoin in the current crisis..

What's happening in the market is booming ...

However, it seems doubtful that cautious institutions were so scared of the crisis that they forgot about the scandalous history of Tether. As recently as last year, the company found itself embroiled in a lawsuit over alleged collusion with the Bitfinex trading platform to cover its losses. Moreover, Tether adheres to an opaque audit policy, so investors cannot even be completely sure that all issued coins are indeed 100% backed by real US dollars..

For comparison, USDC – stablecoins – in literal translation from English “stable” coins – continue to gain popularity in the digital asset market. With … More, the Coinbase exchange does not reflect such a surge in demand at all. Meanwhile, this site is one of the most recognized by regulators in various states of the United States and several other countries..

Perhaps, for now, it is worth refraining from premature conclusions and not rushing to announce a surge in demand for stablecoins, relying on only one statistics on USDT. Instead, it makes sense to try to figure out what is behind such an incomprehensible activation of USDT emission against the background of even dynamics of the stablecoin market as a whole..

Do you have any suggestions about this? Share your opinion in the comments!


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