After a Troubling Month, Tether (USDT) Sees its Market Cap Fall by $250 Million

Nuno Teodoro

Tether (USDT), has seen its market cap fall to $2.11 billion, as roughly $250 million USDT left circulation.

A consequence of recent events that saw the price of Tether decline, reaching a low of $0.8697, followed by an enormous spike in trading volume. Coinciding the fall of Tether’s value, the price of the three biggest cryptocurrencies by market value - bitcoin, ether, and XRP - rose by around 7%.

The circulating supply of the USDT token has been gradually decreasing over the past few days, with nearly 600 million fewer tokens circulating today than last week. The 250 million USDT tokens that recently exited circulation seem to indicate that investors are choosing alternative stable coins.

Alternative Stablecoins

The Gemini Dollar (GUSD) has been an alternative especially favored by investors, as the demand for the stablecoin created by the Winklevoss led to its price rising to $1.19 yesterday. Other stablecoins such as Paxos Standard (PAX) and Circle’s USDC have also made significant gains in terms of market cap and liquidity.

Uncertainty on part of the investors, rumours that Tether was going to be delisted from several exchanges, and Bitfinex suspending all fiat deposits were the likely catalysts that led to the plummeting of Tether’s market cap. Although the company behind the stablecoin, Tether Limited, claims to have enough reserves to match every USDT token, many in the crypto industry doubt the veracity of the audits made to the firm:

There is concern about Tether and whether it is truly backed by dollars and rumors about USDT (Tether) being delisted from various exchanges

Charles Hayter, CryptoCompare CEO

There are also recent reports claiming that Tether has found a new bank in the Caribbean, the Bahamas-based Deltec Bank, where allegedly it is holding the reserves at. It remains to be seen if Tether will be able to recover the thrust of investors and return its dollar pegged value. However, it is important to note that all of the major stable coins have broken their pegs, trading at values higher or lower than $1.

Bitcoin’s Price Surges Nearly 10% to Surpass $8,000 as Crypto Market Adds $20 Billion

The price of bitcoin, the flagship cryptocurrency, has recently surpassed the $8,000 mark in a move some believe is extremely bullish and could help it go up to $20,000. What’s behind the rise is unclear, although a counter trading indicator pointed towards it.

At press time, BTC is trading at $8,055 after rising 10% in the last 24-hour period, according to CryptoCompare data. The flagship cryptocurrency’s market cap is now of $142 billion, and its recovery came merely days after it had a $1,000 ‘flash crash’ caused by a 5,000 BTC sell order.

Bitcoin's price performance in the last 24-hour period

It’s currently unclear what’s behind the cryptocurrency’s rise, although some have pointed out tensions between the United States and China may be helping, as bitcoinj’s price has been moving up when trading volumes are higher on Asian exchanges.

The U.S. recently hiked tariffs on $200 billion worth of Chinese goods, with China retaliating with higher levies on billions of dollars worth of U.S. products. These developments severely affected the stock market, and could be seeing investors hedge with bitcoin and other cryptocurrencies.

Notably, some could have predicted BTC would surpass the $8,000 mark this weekend as CNBC’s Fast Money Twitter account recently posted a bearish tweet showing a head and shoulders pattern, which implied a drop was imminent.

In the cryptocurrency space CNBC’s tweets are seen as a counter trading indicator, as often bitcoin does the exact opposite of what the financial news outlet’s social media accounts predict will happen.

The cryptocurrency’s price rise also comes as search interest for it hits a 14-month high, according to Google Trends data. This means that search interest for BTC hasn’t been this high since February of last year, when it was trading between $8,000 and $11,000.

Mati Greenspan, a senior market analyst at eToro, has noted the cryptocurrency’s price performance is bullish, and that there could be “virtually no major levels of resistance until $20,000.”

Recently, the co-founder and CEO of digital asset exchange Gemini, Tyler Winklevoss, called bitcoin “gold 2.0.” Facebook has also shown it’s getting more serious about blockchain, cryptocurrencies, and payments, which could be heightening interest in the space.

Bob Iaccino, an experience fun manager and veteran trader, has earlier this week argued that the growth of BTC’s layer-two scaling solution, the Lightning Network (LN), could also be supporting the cryptocurrency’s rally.

Altcoins Follow Bitcoin’s Rally

Available data shows that most altcoins have followed the flagship cryptocurrency’s rally, with most being up well over 3% in the last 24-hour period. Top altcoins like Ethereum’s ether, litecoin, XRP, and Zcash are all up by over 7%, with ether rising nearly 10% to trade at $258.

Interestingly Bitcoin Cash, a cryptocurrency that has recently seen a hacker take advantage of an upgrade to get miners to mine empty blocks and that has seen a mining pool have over 51% of its hashrate for a brief period, has risen over 16% in the same period. BCH is currently trading at $415.

Dash and Cosmos are other cryptocurrencies that have risen over 10% in said period. Overall the rally has seen the crypto market add over $20 billion.