Tether’s rising influence on Bitcoin markets

Tether (USDT) is a digital currency that stands out in the crypto world as a stablecoin, which means keeping its value as fixed as possible by linking its value with the value of a fiat currency, e.g., the US dollar. But this advantage is hard to specify, as Bitcoin is less stable than some other crypto-currency.

The crypto market is stabilized by Tether, which functions as an accurate valuation index for traders and investors through its role as a medium of exchange and a store of value. The role of USDT in the Bitcoin market is gaining importance, as it serves as a way to stabilize the price of Bitcoin when there is uncertainty in the market. Traders usually resort to USDT as a haven to protect capital, strengthening its place in the cryptocurrency market.

Tether’s Market Dominance

Tether (USDT) constitutes the core part of all possible stablecoin markets and makes up a considerably large percentage of the entire stablecoin supply. Its market capitalization, which expresses the total value of its coins in circulation, appears to be driven by the most recent events of its growing popularity and use within the crypto world. As per the latest records, Tether is the greatest stablecoin in the market, with its market cap being in the billions.

It is Tether that best performs against other stablecoins like USD Coin (USDC), Paxos Standard (PAX), and BUSD (BUSD). USDT is a prevailing coin and is always in a higher position when compared to competitive coins. Competing entrants have sprung up, but so have increased regulatory scrutinies. Tether has remained market dominant, as it entered the market early, is more liquid, and has won the users’ trust. Still, more competition and regulations could affect Tether’s dominance in the stablecoin sector, leading to a more diverse stablecoin market.

Recommended Read – Does rising dominance of Tether pose risks to the crypto market?

Tether’s Influence on Bitcoin Prices

The relationship between the USDT supply increase and Bitcoin price growth has sparked a lot of discussions on cryptocurrency online platforms. Certain analysts determine that Tether’s issuance could be particularly variable during periods of high Bitcoin volatility and may or may not affect Bitcoin prices. The fact that the Tether tokens that are extensively traded with Bitcoin as a pair can affect trading volumes and market mood even in the short run has the potential to spur many changes in Bitcoin value.

Moreover, there were such opinions of experts that described Tether’s influence on Bitcoin’s volatility as more than mere correlation and proposed that there was a tendency for Tether issuance to be used strategically to manipulate Bitcoin prices in the market. Nevertheless, there are a lot of questions left unanswered which may be explained by further investigation and discussion.

As per the best Bitcoin price prediction, back in the summer of 2023, the Tether’s USDT wasn’t as strong, and predictions showed it might go down just a little below the usual $1 level. This caught a lot of traders by surprise and led to the fear of mass selling of USDT. By the end of August 2023, USDT was being traded at a spot price of $0.9992, which has deviated from the usual $1, according to reports from independent market research.

From the 29th of August 2023, the value of a Tether (USDT) coin was about $0.9992, having been traded in a volume of $17,487,592,399 throughout the 24-hour period. On CoinMarketCap, the third most valuable asset after the USD coin was USDT, with a current market capitalization of $82,794,088,135. Currently, USDT’s circulating supply is 82.86 billion tokens out of a total supply of 85.44 billion tokens.

Looking Forward

Considering the future for Tether (USDT), the two most likely possibilities will likely be fulfilled in either of these two main directions. Moreover, the power of Tether in the stablecoin market will be strengthened further as more users, traders, and institutions use its liquidity and reliability to interact in the market. Notwithstanding the regulatory watchdog policy and the threat posed by other stablecoins, Tether remains the most used stablecoins globally, thus maintaining its influence in the crypto ecosystem.

While Tether’s influence could be reduced by regulatory crackdowns or up-and-coming stablecoins with advanced features like transparency and compliance, it could also give this stablecoin more space to solidify its position in the market. Unit-wide trading and investor transparency actions that target Tether’s asset backing and trust issues could result in people not trusting the stablecoin anymore and selling their shares, hence the decline in market share. Moreover, the coming of other stablecoins with additional implementing don’t-compliance and transparency functions into the system could be a huge deal for the presence of Tether in the currency field.

Final Thought

The future is something that Tether (USDT) will have to face with possible scenarios, including continuous domination, decline, and decrease in power. Regulatory framework and competition of other popular stablecoins could be challenges for Tether in terms of market position whereas its stability and huge adoption make it more difficult for others to replace it in the near future.

In the coming future, the destiny of Tether will be determined by how well it can overcome the concerns of the regulators, ensure transparency, and build investor trust. It could be that Tether remains at the top or is not that influential. A quantum of the story tells how the cryptocurrency market could be dynamic and subtle in the time of adapting to regulatory and competitive spheres.

Roxanne Williams

Roxanne Williams has recently joined as a market reporter for CryptoNewsZ - the 24/7 crypto news site, where she produces recent stories, technical analysis and price updates on world's leading cryptocurrencies.

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