Tether recorded a transaction higher than Bitcoin last Thursday, setting a new historical record in its daily trading volume of approximately US $20 billion, while Bitcoin remained around 17 billion.
Tether’s trade volume exceeds its historical highs
The volume of Tether has been increasing throughout the year, at the same time that all the pairs of operations that were previously led by Bitcoin have been decreasing significantly because the stablecoins are becoming more popular to be negotiated against the altcoins than BTC.
Tether’s total offer has experienced rapid growth since 2017, reached a new all-time high of 4.27 billion units compared to $ 2.7 billion last year. Tether is used in between 40% and 80% of all transactions in the Huobi and Binance exchange houses, the latter of which now offers loans based on Tether guarantees.
Tether has really good liquidity in China. Asian operators over the counter (OTC) avoid banking restrictions using stablecoin. They maintain that a significant part of their movements comes from Chinese customers who use Tether to move assets beyond the strict capital controls of their country, such movements being estimated at around 30 million dollars a day between Russia’s border with China, using USDT.
Despite the creation of new dollar-anchored tokens, the growing market preference for Tether can be evidenced. The dominance of the Tether among its competition has always been superior. The token currently stands at 81.77% dominance in the market with respect to its competition.
Tether’s new Blockchain
Tether has migrated the issuance of its Omni Layer blockchain tokens to Ethereum. During the last week, transactions based on ERC-20 (tokens based on the Ethereum Blockchain) have increased considerably with respect to those of Omni. On Thursday, there were about 100,000 ERC20 transactions compared to 39,000 Omni transactions. The utilization of the Ethereum network has skyrocketed by 90%. In the last month, Tether paid the computers that process transactions in the Ethereum digital book USD $260,000 in fees.
The change to the ERC-20 standard is because the Ethereum Blockchain has much lower network transaction rates and much faster confirmation times (15-30 seconds) compared to the Omni Blockchain. There are currently approximately 2.5 billion USDT in the Omni network and 1.5 billion USDT using the Ethereum network.
Considering that the aforementioned characteristics may be attractive to active traders, it is objective to think that the issuance of Tether in Ethereum continues to grow in relation to the issuance in Omni, which will have as a consequence that the market demand for the Tether increases progressively.
Polemic around tether and its influence on the price of Bitcoin
The relationship between the issuance of Tether with respect to the price of Bitcoin is a controversial issue in the crypto world due to the lack of clarity about USDT financial statements and the direct relationship with Bitfinex.
The main stablecoin in the market is immersed in a quiet complex legal controversy. The New York prosecution filed charges against Tether and Bitfinex in the Supreme Court, claiming the cover-up of losses of $850 million from the Bitfinex company with funds that were intended to support the issuance of Tether; and also demonstrating that the token was not fully backed by the dollar; charges that both companies deny. However, this trend seems to have no impact on the growth of the currency.
Chinese merchants use the Tether to liquidate their broader portfolios in global exchanges such as Binance, OkCoin or Huobi. This affects the Bitcoin market because traders and exchange houses use this cryptocurrency to obtain fiduciary liquidity. Exchange houses like Kraken and Bitfinex offer these pairs against Bitcoin. When investors buy Tether using fiat money, the emission and demand of the token increases, which also increases the total market supply. Most Bitcoin transactions are in exchange with Tether.