Markets

Understanding Tether’s USDT Dominance

Published

8 months ago

23 May, 2024

Tether Treasury Mints 1 Billion USDT, Crypto Market Awaits Impact

Stablecoins have become an essential part of the blockchain space, offering stability in a highly volatile market. Although there are dozens of stablecoins with different collateral available to investors today, Tether’s USDT remains the clear choice for most crypto users.

In this article, we explore the importance of stablecoins, focusing on USDT and its unconditional dominance.

The need for stability

Stablecoins are digital assets designed to maintain a stable value by being pegged to a reserve asset such as the US dollar, euro or even commodities like gold. They achieve this stability through several mechanisms, including fiat escrow, crypto escrow, and algorithmic stable currencies. Fiat-backed stablecoins, the most common type, back each issued token with reserves of the corresponding fiat currency, ensuring the support of a real-world asset.

While many crypto investors like a little volatility, the level seen in most crypto assets may make it difficult to use them for payments or trading. Stablecoins solve this problem by offering a stable and reliable alternative, facilitating their use in a wide range of applications, including base trading pairs, remittances, and decentralized finance (DeFi).

This has resulted in substantial growth for stablecoins, now boasting a combined market capitalization of $161 billion. The graph below highlights this significant increase, which began in 2020.

See more information: How to Buy USDT in 3 Easy Steps – A Beginner’s Guide

Market value of stablecoins. Source: Inside the block

“While some of this growth is due to growing interest in cryptocurrencies, it is primarily driven by the growing importance of DeFi and the crucial role that stablecoins play in DeFi primitives such as lending protocols and automated market makers (AMMs),” Vicente Maliepaardchief marketing officer at IntoTheBlock, told BeInCrypto.

USDT: the undisputed market leader

Despite strong competition, Tether (USDT) has established itself as the most important stable coin in the cryptocurrency market. Launched in 2014, USDT is pegged to the US dollar, with each token reportedly backed by an equivalent amount of fiat currency held in reserve.

Data from Inside the block shows that USDT, with a market cap of $111 billion, represents just over 70% of the total stablecoin market capitalization. In contrast, the second-largest stablecoin, USDC, accounts for just 21%.

See more information: 9 Best Crypto Wallets to Store Tether (USDT)

Stablecoin comparison Comparison of stablecoins by market cap. Source: Inside the block

Furthermore, there are no signs of this growth slowing down anytime soon. The number of USDT transactions has increased significantly since the beginning of the year and is approaching new highs.

Number of USDT transactions. Source: Inside the block

Maliepaard notes that USDT’s dominance is attributed to several factors:

Liquidity and Accessibility: USDT has the highest trading volume among stablecoins and is available on most centralized platforms and decentralized exchanges as a base trading pair.
DeFi Integration: Many DeFi protocols and platforms use USDT for trading, lending, and borrowing, allowing participation without exposure to price volatility.
Cross-border transactions: USDT facilitates fast and cost-effective cross-border transactions, offering an efficient alternative to traditional ones Bank officer systems.
Stable store of value: In regions suffering from hyperinflation or economic instability, USDT offers a reliable store of value.

Comparing USDT Usage on Different Chains

While USDT activity is growing across all chains, not all are created equal. Data suggests that users utilize stablecoins differently across various networks. By examining its behavior on different chains, we can see how USDT is used in different ways. Whether for trading, transferring value or acting as a stable store of value, the versatility of USDT is evident.

TRON dominates USDT transactions

TRON leads in transaction volume with a dominant share of 78%. The graph below highlights its superiority compared to other blockchain networks.

This prominence is mainly due to TRON’s low transaction costs and high availability for deposits and withdrawals on major centralized exchanges, making it the preferred option for cross-border Tether USDT transactions. Surprisingly, the runner-up is not Ethereum but Polygon, which has more than 8% of total USDT transactions.

USDT market share by chain. Source: Inside the block

Transaction volume comparison

Examining the stablecoin’s market share volume reveals that Ethereum’s transaction volume far exceeds its number of transactions, highlighting its role in facilitating higher-value transfers. In contrast, networks like Polygon, Optimism, and Avalanche they have a greater number of transactions, but contribute less to the overall volume, indicating their use for smaller, more frequent transactions.

USDT on-chain volume Volume market share on the USDT network. Source: Inside the block

Retention vs. Transaction

The average retention time of USDT on each chain further supports this conclusion. Data shows that Ethereum users typically hold USDT for 228 days, almost three times longer than Optimism holders. TRON addresses also hold USDT for an extended period of time, averaging 183 days.

USDT retention time Average waiting time. Source: Inside the block

These insights indicate that on Ethereum and TRON, USDT is held primarily to mitigate market volatility by serving as a stable store of value. On the other hand, in networks like Optimism and ArbitrationUSDT is often used for transactions, likely in DeFi-related applications, where quick access to liquidity and transfer speed are crucial.

The future of USDT

Stablecoins, especially USDT, play a vital role in the blockchain industry by providing stability and increasing the utility of digital assets. USDT’s recent growth across various blockchain networks solidifies its position in the cryptocurrency market. As the industry expands, the importance of stablecoins will likely increase, driven by their role in DeFi, commerce, and bridging the gap between traditional finance and blockchain.

Disclaimer

In line with the Confidence Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyIt is Disclaimers have been updated.

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Markets

Crypto Markets Rebound as Spot Bitcoin ETFs Attract Massive Inflows

Published

6 months ago

17 July, 2024

FinCrypt Staff

Crypto Markets Rebound Ahead of Early Ethereum ETF Approval

This week saw $722 million worth of Bitcoin spot ETF inflows, including the largest daily inflow in a month.

Cryptocurrency markets rallied on Wednesday, driven by inflows into spot Bitcoin exchange-traded funds (ETFs).

The price of Bitcoin (BTC) is up 3% over the past 24 hours to last change hands at $65,200, according to CoinGecko. Ethereum (ETH) is up 2% and is trading at $3,471. Solana (SUN) and Polkadot (POINT) increased by 4%.

Bitcoin spot ETFs saw $422 million in daily inflows on Tuesday, the highest in the past 30 days, according to Far side data, . The all-time record for a single day was $1.05 billion on March 12.

Among Tuesday’s top contributors, BlackRock’s IBIT led with $260 million in inflows, followed by Fidelity’s FBTC with $61 million. This week has already seen more than $722 million in inflows.

Among the top 100 cryptocurrencies by market cap, Worldcoin (WLD) led with a 28% increase, followed by Helium (HNT) with 20% and Lido DAO (LDO) with 15%.

Worldcoin, a decentralized identity project led by OpenAI CEO Sam Altman, announced is extending the lockups for early investors and team members. This means that tokens will be gradually released through 2029, instead of the original 2027 plan. Token unlocks are generally seen as a negative because they increase supply and early investors can sell their tokens for profit.

Meanwhile, XRP, the token of the XRP Ledger network, jumped 8% after the CME and CF benchmarks introduced new indices and reference rates for XRP.

U.S. stocks faced a downturn on Wednesday. The S&P 500 fell 1%, while the Nasdaq Composite and Dow Jones Industrial Average both fell 2%.

Source

Markets

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Published

6 months ago

17 July, 2024

FinCrypt Staff

Altcoins on the cusp of a major breakout – WLD, AR, and INJ prices could surge by 20% in the coming days

Crypto markets appear to have been taken over by the bulls as major tokens have surged above their crucial resistance zone. Bitcoin surged above $65,000 while Ethereum was above $3,500, and XRP, which had remained passive for quite some time, surged over 40% in the past few days to hit $0.6. The uptrend has been captured in most altcoins, with Worldcoin (WLD), Arweave (AR), and Injective (INJ) leading the rally. Here’s what to expect for these tokens in the coming days.

Worldcoin (WLD) Price Analysis

O Worldcoin Price has been trading inside a descending wedge since it marked a new ATH near $12 in the final days of Q1 2024. The recent price action helped the price break out of the upper resistance of the wedge, breaking above the crucial resistance zone between $2.21 and $2.39. Market sentiments have changed, but technicals suggest that the bulls may remain passive for a while, which could offer some room for a bearish pullback.

The price broke out of the wedge with a significant increase in volume, but the current volume suggests that the bulls have taken a step back. Meanwhile, the RSI is about to reach the upper boundary, which could attract bearish forces. Additionally, the DMI has undergone a bullish crossover, but the decline in the ADX suggests that the rally may remain consolidated above the gains. Therefore, the WLD price is expected to maintain a horizontal consolidation between $3 and $3.3 and trigger a fresh rally to $4.4 during the next bullish rally.

Arweave (AR) Price Analysis

Arweave formed a strong base around $25, which helped the rally trigger a recovery during the bearish attack. Mt. Gox and German terror forced the price to fall below $20. However, the recent price action has brought the altcoin within the bullish range and raised expectations of maintaining a decent uptrend for a few more days.

AR price has hit one of the major resistances around $30 to $31.5, which could act as a strong base once overcome. The buying volume is slowly increasing, which could keep the bullish hopes for the rally high. Moreover, the supertrend has just flashed a buy signal, indicating a clean reversal of the trend. Therefore, AR price seems primed to maintain a healthy uptrend and rally above $40. However, if the bulls maintain a similar trend, making new highs above $50 may not be a tedious task for the bulls.

Price Analysis of Injective (INJ)

Injective price has been showing sharp strength since the beginning of the year and hence, the recent turnaround is expected to revive a good uptrend going forward. The bears engulfed the rally to a large extent, but the recent price action suggests that the bulls have regained their dominance. Therefore, INJ price is expected to maintain a strong uptrend with a bearish interference on the way down.

INJ price has surged above the lower support zone and has registered consecutive bullish candles. Although the volume is below the required levels, the OBV is maintaining a sharp uptrend. Furthermore, the Ichimoku cloud lead span B is heading towards the lead span A and a healthy crossover indicates the start of a new uptrend. However, INJ price may be out of the bears’ reach once it secures the resistance zone between $30.77 and $32.12, which seems to be on the horizon.

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Markets

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Published

6 months ago

17 July, 2024

FinCrypt Staff

Ethereum at $3.5K, Exchange Supply Hits 34-Month High

Ethereum (ETH) supply on exchanges has hit a 34-month high as the asset’s price surpassed the $3,500 mark.

ETH has risen 2.3% over the past 24 hours and is trading at $3,490 at the time of writing. The second-largest cryptocurrency — with a market cap of $419 billion — briefly touched an intraday high of $3,517 earlier today.

ETH Price, Whale Activity, RSI, and Exchange Supply – July 17 | Source: Santiment

Ethereum’s daily trading volume also increased by 7.6% to reach $19.8 billion.

According to data provided by Santiment, the supply of Ethereum on exchanges has reached $19.52 million ETH. This level was last seen in September 2021, when the asset was trading around the same price.

On the other hand, data from the market intelligence platform shows that the number of whale transactions has fallen by 12% in the last day — falling from 8,730 to 7,629 unique transactions per day.

The move shows that the supply of Ethereum on exchanges has been increasing with small deposits rather than large transactions from whales.

Additionally, the ETH Relative Strength Index (RSI) is currently hovering at the 60-mark, per Santiment. The indicator shows that Ethereum is slightly overbought at this price point, but it may not be in a critical position due to its large market cap.

One of the main drivers of Ethereum price increase is ETH spot expectations ETFs in the US Investment products are scheduled to start trading on July 23rd.

Source

Markets

Bits + Beeps: How to Play the ‘Trump Trade’ in Cryptocurrencies After the Assassination Attempt

Published

6 months ago

17 July, 2024

FinCrypt Staff

Bits + Bips: How to Play the ‘Trump Trade’ in Crypto After the Assassination Attempt

Also, how much will the Fed cut rates (and when)? What will be the inflows into ETH ETFs? And what is the near future for Bitcoin?

Posted on July 17, 2024 at 12:00 PM EST.

Listen to the episode at Apple Podcasts, Spotify, Capsules, Source, Podcast Addict, Pocket molds, Amazon Musicor on your favorite podcast platform.

In this episode of Bits + Bips, hosts James Seyffart, Alex Kruger and Joe McCann, joined by guest Jack Platts, dive into the market reaction to the recent assassination attempt on former President Donald Trump, analyzing how this event will influence the 2024 US presidential election and the cryptocurrency markets.

They also cover potential rate cuts: Could there be a cut in July? How big could the September rate cut be? Could the decision be influenced by the upcoming election?

They also give their predictions on what percentage of BTC ETF inflows the ETH ETFs will reach, and James talks about what he expects for Grayscale’s ETHE (hint: his outlook would be positive for ETH).

Finally, they delve into what’s next for Bitcoin as the German government runs out of BTC and Mt. Gox distributions begin. Just now?

Program Highlights:

Whether Trump’s shooting decided the election and whether the event caused a “flight to safety”
How election markets are becoming a place to watch election probabilities and whether cryptocurrencies “lean right”
Whether rate cuts will occur in July or September and by how much they will cut: 25 bps or 50 bps
How Joe sees the relationship between global liquidity cycles, rate cuts, and the potential rise of Bitcoin
What are the new updates about Ethereum ETFs and their expected launch?
Why Solana Hasn’t Performed Significantly Better Since Trump News
What Market Breadth Indicates About the Current Market Rally and the Impact of Rates on Small Caps
Everyone’s predictions on ETH ETF inflows and how much outflow we’ll see on Grayscale’s ETHE
What’s Next for BTC After German Government Exits Bitcoin and Mt. Gox Giveaways Starting This Week