Over the past few months, tether or USDT has become an increasingly popular stablecoin in the crypto market.

The market value of the coin has ballooned as its adoption has risen, which now accounts for a significant portion of the Ethereum network’s traffic.

The increasing growth of the currency has acted as an indicator that has allowed and given investors new signals regarding potential market trends.

The data indicates that the leading cryptocurrency exchange Binance now holds a large amount of the stablecoin Tether.

1 billion USDT on Binance:

According to data shared by Jason Choi – a Wharton School alumnus and head of research at crypto hedge fund The Spartan Group – there is now $1 billion worth of Tether trading solely on Binance, not counting the other stablecoins it supports, including Including “Binance USD”, “USD Coin” and “Paxos Dollar”…

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According to the chart above, this metric is up 1,000% from $100 million USDT on Binance at the $10,500 Bitcoin peak in mid-February.

The biggest growth occurred after the “mid-March” crash that touched the price of Bitcoin and other crypto assets.

Why is this considered a positive for the crypto market?

While this metric is a relatively strange metric to track, the exponential growth in the amount of USDT present on Binance indicates one thing, which is that there is likely to be a rapidly increasing level of latent demand for cryptocurrencies.

Given that the USDT growth of Binance, which was relatively stable, and was not marked by a significant increase, indicates a direct deposit by “tether”, which indicates and gives an indication that individual investors are sending their stablecoins to the platform en masse.

As for why, they are probably waiting to unload USDT for other cryptocurrencies, be it Bitcoin, Ethereum, or something else.

More importantly, it is not just USDT that has seen growth and rise, as the past few weeks have seen a significant return in the total value of the stablecoins, Nick Carter of CoinMetrics noted that the total value of these coins has been on a sharp rise, telling:

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Stablecoins collectively traded over $2 billion in March 2020, the best month ever, as the stochastics grew by $500 million.

The value of all stablecoins exceeded $8 billion, or roughly 4.2% of the entire year crypto market.

There are interpretations that the market will reach a point where these investors will want to dump their holdings of stablecoins towards bitcoin, causing a rapid rally in the crypto market.

There is an estimated $2 billion in cash sitting in crypto/Holdcos funds. There is another $2 billion+ sitting in stablecoins, and another $2 billion sitting in the /silvergate/signing exchanges.

That’s 6 billion dollars in fiat already on board to buy your bags. Imagine thinking that we need new money to reach $10,000.

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– Su Zhu (zhusu) February 18, 2019

Su Chu, CIO, CEO and hedge fund at Three Arrows Capital, summed up that what is happening in the market makes a good sense, stating:

There is an estimated $2 billion in cash sitting in crypto investment funds, another $2 billion sitting in stablecoins, and $2 billion sitting in trading platforms.

Imagine thinking we need new money to get bitcoin to $10,000?

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