Billions of Dollars May Be Waiting to Enter Bitcoin, Stunning USDT Data Shows

Tony "The Bull" Severino

1 year ago

2 mins read

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Tether has long been used as a flight to stability when Bitcoin crashes. The influx of capital reentering the cryptocurrency market also helps to drive up valuations during bull runs.

With over $9 million sidelined and climbing, could all of this capital be waiting to enter Bitcoin at the first sign of a breakout? Or has Tether developed new use cases that are fueling its tremendous growth in 2020?

Tether’s Unstoppable, Growing Market Supply Dominance Over Crypto

Cryptocurrency stablecoins like Tether, USD Coin, and Paxos Standard all are tied 1-to-1 to the dollar. Each asset is backed by a corresponding dollar, or an equivalent valued asset.

By acting as a stable peg to the dollar, these assets have long been utilized as a safe haven during crypto market volatility. During drawdowns – the majority of the last three years – stablecoins are especially valuable to crypto traders.

Moving capital from Bitcoin, Ethereum, Ripple, and other altcoins to stablecoins can protect wealth from loss. It also keeps capital in the cryptocurrency market, rather than cashing out to fiat.

All of this capital remains on the sidelines waiting for an uptrend to begin, then crypto traders will use the USDT to take positions.

If all of this USDT is sitting waiting on the sidelines to make its way into BTC, it could result in a major boost to Bitcoin’s next bull run.

The Tether market cap has now surged past $9 billion. In the comparison chart below, the growth in Tether’s market cap has begun to outpace growth in Bitcoin price.

Bitcoin BTCUSDT Tether Market Cap Comparison | Source: TradingView.com

Is This Money Sidelined Waiting For Bitcoin, Or Has USDT Found A New Use Case?

Over time, stablecoins have become more valuable than the dollar they are tied to. Dollars are stable, however, they are often costly to move and require an intermediary to do so.

Because stablecoins are cryptocurrencies built on blockchains like Omni-layer Bitcoin, Ethereum, and others, they make moving money fast, easy, and cheap. And because they are tied to the dollar, the stability that earned these assets their names remains.

This gives them a flexibility that the dollar cannot yet match, and is perhaps becoming a strong use case outside of a safe haven during downtrends.

Tether’s growth may be less tied to Bitcoin than it once was. Regardless of any bullish moves in Bitcoin, much of the USDT supply could remain parked there for whatever reason.

However, not all of it would remain in the stablecoin, and at least a portion would flow into the first-ever cryptocurrency. Along with new fiat coming in, institutional money finally entering the market, any inflow of stablecoins could be the final ingredient missing for Bitcoin’s next bull market.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

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In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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