Alongside the market’s upward momentum last week, USDT continues to be minted, resulting in a new all-time high for its market capitalization.
According to the H1 2023 Stablecoin Outlook report, Tether (USDT) remains the “King of Stablecoins” with a trading volume of 2.2 trillion USD. And this is likely to continue unchanged in the second half of 2023. As the market continues to rise, USDT plays a crucial role in liquidity.
According to CoinMarketCap data, on July 16th, the market capitalization of USDT reached 83.66 billion USD, surpassing the previous peak of 83.2 billion USD in the T5/2022 period. It seems that for investors, during uptrends they need USDT for FOMO (Fear Of Missing Out), while during downtrends they still need USDT for safe haven and “bottom fishing”.
The increasing amount of USDT indicates the potential buying power of investors. However, if they hesitate to make purchases, the price cannot experience a significant upward movement. This can be measured by the volatility of the USDT dominance in the total market capitalization (USDT.D).
An uptrend occurs when three factors align: Bitcoin price increases, USDT market capitalization increases, and USDT dominance (USDT.D) decreases.
In the current phase, two factors, namely an increase in Bitcoin price and an increase in USDT market capitalization, have already emerged. Now, the remaining action is for USDT dominance (USDT.D) to decrease, which would indicate that investors are no longer willing to stay on the sidelines and are deciding to spend the amount of USDT they hold.