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Tether’s rising supply points at cautious investors

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Bitcoin's surge to $18,000 is not because of Tether
Source: Pixabay

The crash that shook every market on 12 March highlighted inefficiencies in the financial system. As the market collapsed in the blink of an eye, Paolo Ardoino, CTO of Tether and Bitfinex opined that it was a learning experience for many investors and crypto users in the market.

After the 12 March crash, Tether supply increased and by June it had grown by nearly 4.5 to 5 billion. This interest among users was attributed to Bitcoin’s halving. According to Ardoino, Tether has been a popular asset not only for crypto trading but has garnered interest among users outside. The CTO who appeared in the latest On The Brink Podcast added:

“One thing that I want to underline here is that the tether growth in the last months, the 4 to 5 billion growth, doesn’t necessarily mean new money coming into crypto.”

He explained that on the day of the crash many investors were unable to make quick calls on trading their cryptocurrencies. This was because fiat dollar was stored in banks and users were unable to convert into tether and trade their cryptos. He opined that this was a reminder for the users to store their money on-chain for hedging against the violent price actions. Thus, the number of rising tether supply may be an indication of these users storing their money on-chain in the form of Tether, to enable instant action.

This has been giving way to Tetherization or Dollarization [Tether dollars] concepts. The need for crypto-native liquidity has been important from investors’ perspective and Bitfinex has been proving to be the most-liquid exchange currently. According to CoinMarketCap’s revised list of top exchanges in terms of liquidity, Bitfinex was ranked number one. With the market cap of its stable coin, USDT reaching 9.69 billion, it has been potentially parked in the sidelines with the anticipation of BTC value to pump in the coming days.

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Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.

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