Is Bitcoin Party Over? Trading Is Only Active for Those who Bet on Tether (USDT)

 In Altcoins, Bitcoin, Exchanges

The inflow of institutional money seems to be delayed, and Bitcoin buying is now just an inflow of USDT tokens.

The days when eager buyers maxed out their credit cards to buy Bitcoin may be over. Even the Korean markets have cooled down. But trading continues – this time, saved by the Tether (USDT) asset. At first sight, Bitcoin’s price levels are robust, at $6,743.53. While altcoins slide, Bitcoin keeps its position, and its price dominance expanded again to 43.2% of the total market capitalization for all coins and tokens.

 

But the reason behind this may be token-fueled liquidity. Printing USDT coincided with the rapid climb in Bitcoin starting in the summer of 2017. But at this time, every injection of USDT also caused frenzied buying through all other possible means. Now, newcomers are either waiting on the sidelines, or most have lost hope that there are more quick gains to be made in crypto. However, for dedicated traders, using USDT is another source of earnings.

Even though more than 2.7 billion USDT were created, not all of them found their way into BTC trading. Until recently, the share of USDT in BTC trades was around and below 20%, with healthy levels in Japanese Yen, US Dollar, Korean Won, and several other currencies. But now, the picture changed rapidly, over the course of a few days.

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According to data from CryptoCompare, more than 54% of all BTC trades are Tether exchanges, due to the large share of Bitfinex trading. It seems now the crypto markets have moved to a phase where all exchanges are internal, and the next few years may see prices move only based on the actions of crypto insiders, and not institutional traders from the world of traditional finance.

A few weeks ago, Tethers went into a handful of altcoins – and now, it seems gains are redirected into Bitcoin. While this may be positive for prices across the board, it also means that for new Bitcoin buyers, selling back into the safety of fiat is, in fact, difficult, and they may end up with USDT tokens – which can, in theory, be redeemed for cash, but the process is slow and there is a price penalty.

In the meantime, the TrueUSD (TUSD) digital asset saw its supply shrink from 88 million down to 81 million tokens, looking as if tokens were burned and turned into cash. For TUSD, the reverse exchange should be easier – but this also means an outflow of funds from the crypto market.

https://twitter.com/blbtheman/status/1016302477568806912

In the coming months, expect to see more automated trading, with possible recoveries in BTC prices. However, with slim volumes down to $3.8 billion (or equivalent) in 24 hours, the price of Bitcoin may be easily manipulated in either direction.

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