Years later, when we look back to 2020, we could call it ‘the year of cryptocurrencies’, as we not only experienced Bitcoin’s third halving, but also witnessed an unprecedented surge in supply of Stablecoins as USDT since March. As of September 12, the total market capitalization of the top four Stablecoins reached $ 17.65 billion, among which Tether (USDT) made up the majority of the total, at $ 14.32 billion.
As Coincodex.com data indicates, the total market capitalization in March stood at around $ 5 billion (it had stayed at $ 5 million for 8 months), then rose to $ 17.65 billion in six months. Such a significant boost naturally sparked heated debates over the cryptocurrency market with most investors believing that the momentum from the Stablecoins offering suggests a Bitcoin ‘binge’.
USDT Supply Indicates Bitcoin Buying Power
Stablecoins are widely used as a form of de facto cash in the cryptocurrency market. Since its market value is tied to some external reference, its price is more “stable” compared to that of Bitcoin.
Compared to fiat money, they have the advantages of blockchain digital assets in instant money movement and ease of payments, allowing merchants to easily convert their stablecoins into fiat or other cryptocurrencies.
Also, in some countries like China and Russia, where Bitcoin is prohibited in banking transactions, traders tend to exchange their fiat money for stablecoins, save them, and buy other cryptocurrencies when the time is right.
In recent years, there seems to be a correlation between the market capitalization of USDT and the price movements of Bitcoin. One aspect of the buying power of Bitcoin with USDT is that when the price of Bitcoin rises, the same amount of Bitcoin requires merchants to pay more, so more fiat money would have to flow into the market, thus boosting the supply of USDT. upwards. In turn, the increase in the supply of USDT could indicate a rise in the price of Bitcoin.
The market is preparing for a Bitcoin spike
Currently, the total supply of USDT is $ 14.4 billion, occupying 4.1% of cryptocurrencies. The recent minting of 250,000,000 USDT could be a sign that more investors are flocking to Bitcoin and altcoins to hedge against inflation and bleak economic prospects.
The new USDT issuance is seen by many critics as a result of growing confidence in Bitcoin price expansion after the Halving, as traders, anticipating a bull market, will prepare to funnel their USDT into Bitcoin.
This hypothesis is supported by a Glassnode survey, in which data showed an increase in Bitcoin whales flocking to the Bitcoin market since Bitcoin plummeted in March. Additionally, the surge in USDT could contribute to the surge in new investors hoping to benefit from Bitcoin’s rebuilding boom, which recently tested the crucial $ 12,000 level.
Planning for the bull market in advance
Every USDT could be the boost Bitcoin needs to skyrocket. If we look at history, the rise of Bitcoin always came after the previous Halving events.
In the first Halving, the price of Bitcoin rose from $ 11 to more than $ 1,100 in one year. As for the second Halving, the price soared from $ 600 to $ 20,000 at the end of 2017. The same could apply to the third Halving, however, this process could take months to produce, so it is advisable to diversify our strategies: be bold and keep us safe.
Here are two options worth trying while waiting for the hike:
Option 1: A wallet designed for merchants and HODLers
You may want to hold your BTC and wait for the bull market to come after the Halving. However, since we don’t know how long it will be until the next bull market hits, in the meantime you could consider storing your BTC in an interest-bearing portfolio, where your deposit could earn up to 30% annualized interest rate.
Option 2: Manage trade with less risk
In addition to buying more BTC and waiting for the bull market, you could earn additional BTC from leveraged trading, which allows traders to open a leveraged position X times their actual capital. By predicting the correct Bitcoin price trends, traders can earn higher returns in a shorter period of time.
Bexplus, a leading platform in leveraged cryptocurrency trading, even offers 100x leverage. Even in times of great volatility, you can make a profit with the help of Bexplus. Likewise, your “Stop Loss” and “Take Profits” options can help you reduce risks and secure benefits.
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