Who is buying USDT and who is supporting the bitcoin price?

Original title: "Who's buying USDT, Who's Supporting Bitcoin?"

Source: Decrypto

Odaily planet | Moni

If there's one stable coin that's bitcoin's favorite, it's Probably Tether.

However, the Tether stabilisation currency has long been seen as not having enough endorsements and has caused quite a bit of controversy in the cryptocurrency industry. But that doesn't seem to be the case, according to a recent market research report by Sino Capital, Tether seems to be in high demand in China. Here, planet (WeChat: o-daily) tries to answer one of the toughest questions bitcoin advocates have ever faced -- who bought the Tether that supports bitcoin?

Indeed, Sino Capital seems to have answered the question by saying that some of Tether's supporters may be Chinese investors.

This explanation helps to address some of the criticisms of the USDT in the market: After academic thesis claims that the Tether manipulated the bull market in 2017, because the Tether (USDT) is founded by its parent company with the same (it claims the company hold three-quarters Tether reserves), and almost all tokens will be transferred to Bitfinex trading platform, when a currency prices, Bitfinex and other trading platform will use Tether to buy COINS, coordination and Tether companies simply "printed" USDT but without any real buyer, That drives up the price of bitcoin.

But is this really the case? According to an analysis by Sino Capital, one of the reasons for Tether's increasing issuance is that a large number of domestic buyers use the OTC platform to buy USDT. Matthew Graham, the company's chief executive, makes two important points:

1. Otc cryptocurrency transactions have a huge market in China, far beyond people's imagination;

2. USDT is a key sticking point in otc cryptocurrency trading.

Since 2020, Tether has created $5 billion worth of USDT in the cryptocurrency market, which now has a total market value of $9 billion, more than 10 times that of any other stable currency. According to preliminary estimates, most of Tether's demand comes from at least 100,000 domestic retail cryptocurrency investors and institutional investors who would probably not be able to access the cryptocurrency market and process trading pairs without the USDT.

Sino Capital reports that:

"USDT is a very popular way for Chinese retail and institutional investors to enter the cryptocurrency market, and most cryptocurrency trading platforms offer a range of over-the-counter trading options."

Perhaps this is one of the reasons for the emergence of USDT, a stable currency well suited for cryptocurrency customers shut out by Banks and regulators because of its high liquidity and integration with many Southeast Asian cryptocurrency trading platforms to support permiscible-free trading services.

Typically, otc platforms hand out Tether, a brokerage model that appears to be flowing more in the domestic market and a way for retail investors to enter restricted markets. Depending on how they operate, these otc deals will match buyers and sellers in the country's highly networked, tightly knit, encrypted economy, or provide liquidity on their own.

Confirming Sino Capital's findings, an employee at an OTC trading platform, who spoke to foreign media on condition of anonymity, said that using Renminbi to trade Bitcoin was not technically illegal, but if someone did, their bank account would be locked down or even shut down. However, the employee admitted that using USDT to trade bitcoin was not entirely legal, but at least it was acceptable.

Matthew Graham says:

"Otc dealers seem to be an 'open secret', especially when it comes to USDT, which is a sensitive topic but also a consensus among the domestic encryption community."

The employee, who spoke on condition of anonymity, said his company now has about 100 large clients who trade more than $5bn a year, depending on the trend in bitcoin prices. Not only that, the employee revealed that a number of OTC clients also have accounts in cryptocurrency-friendly Banks in western countries, including Silvergate and Deltec (the latter also used by Tether in the Bahamas).

The OTC cryptocurrency market has also established relationships with several providers of brokerage services on overseas trading platforms that provide liquidity for cryptocurrency assets, and because of the business relationship between the two entities, it can help cryptocurrency retail investors and institutional investors buy stability COINS directly from Tether.

Sino Capital highlights in its report that while there are grey areas that do not seem illegal, there can still be a lot of potential risks to "dancing" in these areas, but some of the bigger OTC players seem to have mastered the necessary steps to establish themselves in the industry. Matthew Graham explains:

"Encryption money otc services professional level and scale of each are not identical, in addition, legal grey areas in China there are many different types of. High places for professional trading service platform, they will usually cater to some level of whale traders, such as high net worth individuals and institutional investors, these larger trading services generally in Signal and Telegram. Although this is a grey area, but there is no denying that there are certain advantages in terms of economy, the business is booming."

"For encryption currency otc - that is, on the other side of the retail investors, this kind of service that they purchase encryption currency easier, because these deals is basically in the regulatory flying under the radar, some of the smaller account holders can be directly by encrypting currency trading platform over-the-counter service encrypted currency trading, and then use the alipay, WeChat or bank transfer payment."

Currently, the average buying fee for Tether is about 10,000 yuan (about $1,400 at current exchange rates), according to the employee, who also spoke on condition of anonymity. Over the past year, the number of clients of over-the-counter brokerage services has surged 300 per cent.

This trend is presumed to be common among the six cryptocurrency trading platforms in China that offer over-the-counter trading services. And according to reports from Sino Capital and statistics from Chainalysis, the trend may have only begun in the wake of the cryptocurrency ban that has led to an increasing number of domestic bitcoin "trading machines" using Tether.

According to Morgan Stanley (Stanley) data, its Capital claims before regulators begin to pay close attention to domestic currency traders preferred method of payment is RMB (if push the time to go, is the dollar), but as regulators began to take action, USDT fast becoming the preferred trader, also began to gradually expand the volume.

According to a report by Sino Capital, most USDT transactions are completed through word of mouth, recommendation, etc. In this case, some im application platforms provide channels for communication between users.

"Suppress" the price of Bitcoin?

Matthew Graham, CEO of Sino Capital, goes further:

"Our otc sources estimate that about 100,000 retail investors participated in Tether and Bitcoin exchanges, and while the exact number is difficult to verify directly, the estimate is not at all surprising."

"Domestic some of the most intelligent, the most successful traders are often the lowest, this is why so far no one openly talked about buying the cause of the Tether; it is not because Bitfinex/Tether are unsecured USDT into the market, but because those people don't want anyone to Tether are traded (mostly regulators) know."

"Although USDT - BTC trading does allow more domestic retail investors and institutional investors to buy and sell, but in fact, we think the USDT to market to a certain extent, actually inhibits the currency prices. For those who want to use the non-statutory currency trading currency, Tether provides an alternative landing sites, and the price of USDT does not appear larger turmoil."

Source links:https://www.odaily.com

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