Tether Buys 8,888 Bitcoin For $618 Million, But Why Is Price Down?

Scott Matherson

Last Updated: June 11, 2024 7:57 am

3 mins read

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On-chain data shows that the world’s largest stablecoin issuer, Tether, recently added more Bitcoin to its holdings. The magnitude of the purchase has caused the crypto community to speculate on why Bitcoin’s price has dipped instead when such a development is usually bullish for the crypto token.

Tether Acquires 8,888 BTC

Data from the blockchain analysis platform Arkham Intelligence shows that Tether acquired 8,888 Bitcoin on March 31, and the stablecoin issuer now holds almost 75,400 BTC. With its BTC holding, Tether now ranks as one of the largest Bitcoin holders, even having more BTC than some of the most prominent crypto exchanges and Spot Bitcoin ETF issuers.

Last year, the stablecoin issuer announced its plan to regularly purchase Bitcoin for its stablecoin reserves using part of the profits realized from its operations. Therefore, it is no surprise that the company has been able to acquire this amount of BTC since then, especially with the success they have attained recently.

However, what is surprising is that Bitcoin has since dropped below $70,000 following this development. Usually, a Bitcoin purchase of such size should positively impact Bitcoin’s price and not cause a price dip like the one currently experienced. However, there is reason to believe other factors have overshadowed Tether’s purchase and caused Bitcoin to see such a sharp correction.

Why The Bitcoin Price Is Down

Crypto trading firm QCP Capital recently provided insights into why Bitcoin’s price broke below $70,000 and dropped to as low as $66,000. The firm claimed that the sharp move to the downside was due to the “large liquidations on retail-heavy exchanges like Binance, which saw perp funding rates go from as high as 77% to flat.”

The Spot Bitcoin ETFs, specifically Grayscale’s GBTC, also look to have contributed to Bitcoin’s decline as Grayscale continues to experience significant outflows from its fund. On April 1, GBTC saw an outflow of $302.6 million, mainly contributing to the combined net outflows of $85.7 million recorded by these Bitcoin ETFs.This has brought about more selling pressure on Bitcoin, which is currently overwhelming the buying pressure in the ecosystem.

Activity in the derivatives market has also played a part in the bearish market sentiment, with the bears looking firmly in control. Data from Coinglass shows that $409 million has been liquidated from the market in the last 24 hours, with $328 million in long positions being wiped out during this period.

At the time of writing, Bitcoin is trading at around $66,500, down over 4% in the last 24 hours, according to data from CoinMarketCap.

BTC price falls to $65,000 | Source: BTCUSD on Tradingview.com

Featured image from CFA Institute Blog, chart from Tradingview.com

Scott Matherson

Scott Matherson is a prominent crypto writer at NewsBTC with a knack for capturing the pulse of the market, covering pivotal shifts, technological advancements, and regulatory changes with precision. Having witnessed the evolving landscape of the crypto world firsthand, Scott is able to dissect complex crypto topics and present them in an accessible and engaging manner. Scott's dedication to clarity and accuracy has made him an indispensable asset, helping to demystify the complex world of cryptocurrency for countless readers.

Scott’s experience spans a number of industries outside of crypto including banking and investment. He has brought his vast experience from these industries into crypto, which allows him to understand even the most complex topics and break them down in a way that is easy for readers from all works of life to understand. Scott’s pieces have helped to break down cryptocurrency processes and how they work, as well as the underlying groundbreaking technology that makes them so important to everyday life.

With years of experience in the crypto market, Scott began to focus on his true passion: writing. During this time, Scott has been able to author countless influential pieces that have drawn in millions of readers and have shaped public opinion across various important topics. His repertoire spans hundreds of articles on various sectors in the crypto industry, including decentralized finance (DeFi), decentralized exchanges (DEXes), Staking, Liquid Staking, emerging technologies, and non-fungible tokens (NFTs), among others.

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