What is the reason for Tether's crazy USDT issue?

On March 12, bitcoin experienced a historic drop of nearly 50% in a single day, but Tether's stable currency, the USDT, unexpectedly exploded in number. Not only USDT, but other stable COINS, such as USDC and BUSD, are constantly being issued. What happened? What caused this in the market? What will be the final impact on the market? Pulse in the text for the introduction of cryptographic traders thinking and the history of additional prices and records, for everyone to provide reference.

The market value of USDT's assets recently exceeded $6 billion, up $1 billion in the past two weeks alone, according to a march report by rhythm. In an industry worth less than $200bn, such inflows are clearly staggering. In addition, other stable currency: PUSD, USDC, BUSD and so on are also issued tens of millions of different.

This raises two questions:

1) what is driving the demand for stable currency?

2) how will the increase of stable currency supply affect the development of bitcoin?

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Why is Tether's market value rising vertically?

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Sam bankman-fried, chief executive of FTX, a derivatives trading platform, and Alameda, a bitcoin quantitative fund, recently attributed the rapid rise in USDT's market value to three factors:

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1. Otc traders "mainly from Asia" are looking to buy USDT. Although Sam does not elaborate on this assertion, it is a well-known fact that Chinese users use USDT to buy cryptocurrency, as there is currently no channel for legal currency to enter gold, and USDT is currently the fastest way to enter. Some also say the USDT is a good way to move money around the world, and some people don't like to touch bitcoin transactions.

2. People sell BTC for USDT to "hedge their positions".

3. People are selling BTC for USDT to "reduce risk".

All this, Sam writes, "pushes up [the price of the USDT], which in turn pushes up the supply, so much [the USDT] is being cast."

Remain optimistic about bitcoin

While much of the demand for USDT is from sellers rather than investors hoping to buy BTC with a stable currency, the growing demand for "dollars" in the blockchain world is likely to drive the cryptographic market in the future.

As previously reported by CryptoSlate, Charles Edwards, a digital asset manager, said in January that "there has been a significant change in the market value of Tether over the past 1.5 years, leading to the price of bitcoin rising." That view seemed to be confirmed when BTC rose as high as $10,500 in mid-february, pulse learned. In addition, according to pulse, USDT's circulation dropped hundreds of millions of dollars before BTC collapsed from $6,000 to nearly 50% of $3,150 in November 2018; Tether also minted hundreds of millions of dollars' worth of stability COINS before a 330% rise in 2019.

The record level of USDT minting we've seen suggests that bitcoin may soon see a record rise. Basically, it makes sense; While there are few detailed stories of people eventually getting paid back by switching dollars to the USDT, fiat currency's entry into the industry through stable assets should eventually be a catalyst for bitcoin's rise, as USDT holders use those USDT to buy BTC or other digital assets.

This paper is translated and arranged by rhythm, on behalf of the original author's point of view.Cryptocurrency prices are volatile and the market is extremely risky. Pulse to remind investors to operate cautiously, pay attention to the safety of assets.

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