Skyrocketing USDT Supply and Declining Influence Potentially Igniting Next Digital Currency Uptrend
Crypto Market Nearing New Bull Run? Tether's Skyrocketing Market Cap Suggests So
The crypto market is on the brink of touching its all-time high (ATH), with Tether (USDT), the leading stablecoin, potentially setting the stage for a bull run.
May saw Tether's dominance as a stablecoin increase significantly, with increased issuance and a significant drop in the USDT Dominance (USDT.D) ratio. Tether's market capitalization has reached an astounding $151 billion, signaling potential bullish momentum for the crypto market.
On May 31st, Tether injected $1 billion USDT into the market, adding to the $2.5 billion already issued that month. Since the start of the year, USDT's market cap has increased by nearly 10% to $150 billion, demonstrating a surge in demand for this stablecoin.
"Over the past 20 days, $6 billion in cash has been injected into the market through newly issued USDT. This influx, along with USDT's current market capitalization, stands at $150 billion," commented analyst Axel Adler Jr.
Currently, USDT accounts for 62.4% of the total stablecoin market, establishing its dominant position. Notably, the amount of USDT issued on the TRON network exceeds $73 billion, making TRON the leading platform for USDT distribution, surpassing Ethereum.
The rising market cap of USDT indicates potential buying power, as a growing market cap suggests a large amount of capital waiting to be deployed into other crypto assets. Even if crypto prices declined, the market could recover quickly thanks to this incoming capital, setting the stage for a potential new bull run.
Additionally, the decline in USDT.D – which measures USDT's market share relative to the total crypto market cap – signals that investors are using their USDT to buy other cryptocurrencies, such as Ethereum (ETH) or altcoins. This behavior reflects a bullish sentiment in the market.
"When Bitcoin dominance drops while Ethereum's market share rises, it indicates that part of the USDT flow is moving into altcoins," Adler Jr. added.
Analyst Cryptosahintas further explained that the combined USDT.D and USDC.D indices will likely continue to decline, which would further support Bitcoin's bullish momentum in the future.
"The dominance of Tether is gradually decreasing. I expect Bitcoin to continue its upward trajectory. Liquidity is slowly shifting toward riskier assets," Cryptosahintas predicted.
While historical data shows a lag in impact, with Tether's market cap growing from $137 billion to $144 billion, but Bitcoin's price still falling, this complexity makes timing predictions challenging and underscores the importance of interpreting market signals correctly in real-time.
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Investors are increasingly gravitating toward Tether as a stable, reliable source of liquidity and capital. Its dominant position in the stablecoin market and burgeoning market capitalization suggest significant reserves of capital awaiting deployment into various cryptocurrencies. As these funds enter the market, they can help maintain price stability and boost the broader crypto market, potentially leading to a new bull run.
- Tether, the leading stablecoin, has seen a significant increase in dominance, potentially indicating the start of a new bull run in the crypto market.
- The market capitalization of Tether has reached an astounding $151 billion, demonstrating a surge in demand for this stablecoin.
- Analyst Axel Adler Jr. commented that over the past 20 days, $6 billion in cash has been injected into the market through newly issued USDT.
- USDT currently accounts for 62.4% of the total stablecoin market, establishing its dominant position.
- The rising market cap of USDT suggests a large amount of capital waiting to be deployed into other crypto assets like Ethereum, altcoins, or Bitcoin.
- Analyst Cryptosahintas predicted that Bitcoin will continue its upward trajectory as the dominance of Tether decreases, mainly due to the shifting liquidity toward riskier assets.
- Investors are gravitating toward Tether as a stable, reliable source of liquidity and capital, which might lead to a boost in the broader crypto market and potentially a new bull run.
