Tether (USDT) has continued to move into exchanges recently. Here\u2019s why this can be a positive development for Bitcoin.<\/p>\n
According to data from the on-chain analytics firm Santiment<\/a>, $9.99 billion worth of USDT is now on exchanges. The indicator of relevance here is the \u201csupply on exchanges<\/a>,\u201d which keeps track of the total amount of a cryptocurrency being stored in all centralized exchanges\u2019 wallets.<\/p>\n The interpretation of this metric can differ depending on the type of asset that\u2019s being discussed. In the case of Bitcoin, for example, the exchange reserve may be considered a measure of the potential selling pressure, as one of the reasons investors may deposit the coin is for selling-related purposes.<\/p>\n Thus, the cryptocurrency\u2019s supply on exchanges going up could be a sign that selling is increasing in the sector, and hence, the asset\u2019s price may be heading towards a bearish outcome.<\/p>\n In the context of the current discussion, BTC\u2019s supply on exchanges isn\u2019t the one of interest, but rather the metric for Tether<\/a> is. USDT is a popular stablecoin (the largest one based on market cap) that always has its value pegged to the US Dollar.<\/p>\n Here is a chart that shows the trend in the supply of exchanges for Tether over the past few years:<\/p>\n\n Usually, an investor may want to hold their capital as a stablecoin like USDT to keep it away from the volatility associated with other assets in the cryptocurrency sector.<\/p>\n However, many such stablecoin holders use these assets as a temporary safe haven, as they eventually wish to return to the volatile market.<\/p>\n When these investors finally find the time to jump back into cryptocurrencies like Bitcoin, they swap their USDT for them. These traders may use exchanges to make this shift, so a rise in the supply on exchanges of the stablecoin can be a sign that investors are looking to swap into volatile coins.<\/p>\n Such buying using Tether can naturally cause a bullish effect on the prices of BTC and others. So, in this way, the exchange supply of the stablecoin can be considered the opposite of the metric for BTC.<\/p>\n The above graph shows that the indicator\u2019s value has increased in the last few weeks. \u201cThe $9.99B worth of Tether sitting on exchanges is the highest level of buying power for crypto\u2019s top stablecoin in approximately seven months,\u201d notes Santiment.<\/p>\n It should be kept in mind that the rise in the Tether supply on exchanges only implies an increase in the available dry powder<\/a>. Whether Bitcoin would benefit from a boost depends on whether this dry powder is used to buy the asset or not.<\/p>\n Bitcoin has declined in the past couple of days as the asset now trades around the $27,600 level.<\/p>","protected":false},"excerpt":{"rendered":" <\/p>\n Tether (USDT) has continued to move into exchanges recently. Here\u2019s why this can be a positive development for Bitcoin.<\/p>\n According to data from the on-chain analytics firm Santiment<\/a>, $9.99 billion worth of USDT is now on exchanges. The indicator of relevance here is the \u201csupply on exchanges<\/a>,\u201d which keeps track of the total amount of a cryptocurrency being stored in all centralized exchanges\u2019 wallets.<\/p>\n The interpretation of this metric can differ depending on the type of asset that\u2019s being discussed. In the case of Bitcoin, for example, the exchange reserve may be considered a measure of the potential selling pressure, as one of the reasons investors may deposit the coin is for selling-related purposes.<\/p>\n Thus, the cryptocurrency\u2019s supply on exchanges going up could be a sign that selling is increasing in the sector, and hence, the asset\u2019s price may be heading towards a bearish outcome.<\/p>\nBTC Price<\/h2>\n
Tether Supply On Exchanges Is Now Highest In 7 Months<\/h2>\n