Stablecoin Market Hits 2-Year High as Tether Records $5.2B Profit

[Yamane_Keto]

USDT Pushes Stablecoin Market to 2-Year Highs
USDT’s parent company Tether reported a record $5.2B profit in the first half of 2024. This comes as USDT continues what is likely the most consistent growth trajectory in the crypto space, still setting new highs in July despite the broader market retracing.

https://medium.com/intotheblock/usdt-pushes-stablecoin-market-to-2-year-highs-dd8350d01a8f

If this is the case and many of us are still holding Bitcoin because the bull market has not started, what will happen when the price of Bitcoin starts to crash?

[Charles-Tim]

If this is the case and many of us are still holding Bitcoin because the bull market has not started, what will happen when the price of Bitcoin starts to crash?

Are you thinking that people will buy USDT, USDC and other stable coins more which can lead to significant increase in their marketcap?

I have thought of this before but that is not how the market is. I think many people are converting directly to their fiat. While some people might first convert to stable coin and then convert the stable coin to fiat. Example are people from well developed countries like US, UK, European Union countries and South Korea.

Although some people convert to stable coins but not in a way that it would result to increase in stable marketcap significantly unlike how the unstable coins coin marketcap deceased significantly.

[Yamane_Keto]

If this is the case and many of us are still holding Bitcoin because the bull market has not started, what will happen when the price of Bitcoin starts to crash?

Are you thinking that people will buy USDT, USDC and other stable coins more which can lead to significant increase in their marketcap?

Highly liquid trading pairs are always stablecoin pairs like BTC/USDT ETH/USDC and every time your trade you are buying or selling of stablecoins pairs, some will prefer to keep them or sell them for local currency and thus the liquidity of individuals is still large.
What companies or institutions might buy or hold USDT?

[MrSpasybo]

Are you thinking that people will buy USDT, USDC and other stable coins more which can lead to significant increase in their marketcap?

I have thought of this before but that is not how the market is. I think many people are converting directly to their fiat. While some people might first convert to stable coin and then convert the stable coin to fiat. Example are people from well developed countries like US, UK, European Union countries and South Korea.

Although some people convert to stable coins but not in a way that it would result to increase in stable marketcap significantly unlike how the unstable coins coin marketcap deceased significantly.

When we trade on Spot or Future markets, tokens are simply transferred from one person to another. The same goes for USDT, its total market cap doesn't increase. Stablecoins market cap only grows when someone uses fiat to buy USDT/USDC on CEXs. Subsequently, CEXs deposit the users funds into Tether/Circle and mint USDT/USDC. The opposite happens when a user sells USDT for fiat.

The growth in stablecoin marketcap indicates an inflows into the crypto market. It's possible that many investors are ready to buy the dip and accumulate crypto before the next bullrun. This also reinforces my belief in the growth of the entire crypto market immediately after this consolidation phase, perhaps starting from September 2024, leading to a very successful Q4 for crypto.

[Charles-Tim]

When we trade on Spot or Future markets, tokens are simply transferred from one person to another. The same goes for USDT, its total market cap doesn't increase. Stablecoins market cap only grows when someone uses fiat to buy USDT/USDC on CEXs. Subsequently, CEXs deposit the users funds into Tether/Circle and mint USDT/USDC. The opposite happens when a user sells USDT for fiat.

What you meant is that the exchange buying and selling only means a number and not what actually occur on blockchain. But what can makes your post more correct more is that only what makes the USDT marketcap increase is when people buy more of USDT. But people can buy the coin with fiat, bitcoin or any coin. If more people buy USDT more on an exchange than the exchange has, the exchange will have no option than to also buy more USDT onchain which will increase its marketcap.

[debra]

If this is the case and many of us are still holding Bitcoin because the bull market has not started, what will happen when the price of Bitcoin starts to crash?

What do you mean exactly?
The topic is about the increase of USDT market cap, but you're asking about bullish market and the possibility of Bitcoin crash. 
Anyway, bullish season has been starting since the early of this year. You can see that Bitcoin has made a new ATH. I think it is very visible for everyone. Regarding the current big decrease of Bitcoin price, it is not so surprising due to many FUDs or bad news recently.

Are you thinking that people will buy USDT, USDC and other stable coins more which can lead to significant increase in their marketcap?
-snip- -snip-
Although some people convert to stable coins but not in a way that it would result to increase in stable marketcap significantly unlike how the unstable coins coin marketcap deceased significantly.

I don't really understand how it works. But in my humble opinion, there increase of market caps indicates that there are more people using USDT. It makes sense if people convert their fiats to USDT or buy USDT because USDT has many pairs with varied crypto coins. So this will lead to the increase of USDT market cap because more and more people use USDT in the market.

[MrSpasybo]

What you meant is that the exchange buying and selling only means a number and not what actually occur on blockchain. But what can makes your post more correct more is that only what makes the USDT marketcap increase is when people buy more of USDT. But people can buy the coin with fiat, bitcoin or any coin. If more people buy USDT more on an exchange than the exchange has, the exchange will have no option than to also buy more USDT onchain which will increase its marketcap.

Yeah, when we trade on CEXs, everything is just about the CEX internal data, including buying and selling stablecoins. This process doesn't increase the total market cap of the stablecoin. When we deposit or withdraw crypto, that's when things happen on the blockchain. These transactions are conducted on the investor's personal account and interact with DEX, Lending, staking protocols... and are confirmed on-chain.

As I've explained, only when Tether/Circle mints or burns stablecoins at the request of a large user (with a minimum amount of $100K) does their total marketcap change. Ordinary users will not have the need to interact directly with Tether or Circle because their fees are quite high.

[Husires]

As I've explained, only when Tether/Circle mints or burns stablecoins at the request of a large user (with a minimum amount of $100K) does their total marketcap change. Ordinary users will not have the need to interact directly with Tether or Circle because their fees are quite high.

But platforms need to ensure that they have enough Tether/Circle value as blockchain balance equal to what they have in the order book. If you deposit 100 BTC to an exchange and want to convert it to USDT, the exchange will inevitably ask Tether to mint more tokens or use their reserve.

[Hamza2424]

Ahh, there's no active thread in this section but here's the latest development so I've thought why not share it here, they've decided to double the team members for better legal positioning and transparency, but I'm not sure what kind of transparency they are providing but still as you know they are trying to build up a strong financial team.

[Yamane_Keto]

What do you mean exactly?
The topic is about the increase of USDT market cap, but you're asking about bullish market and the possibility of Bitcoin crash. 
Anyway, bullish season has been starting since the early of this year. You can see that Bitcoin has made a new ATH. I think it is very visible for everyone. Regarding the current big decrease of Bitcoin price, it is not so surprising due to many FUDs or bad news recently.

What I meant is that we are still in a bull market and those who have investments will prefer to be in Bitcoin because the possibility of its value increasing is high. However, stablecoins will gain momentum, so what will happen when the Bitcoin price starts to correct and everyone wants to buy stablecoins and sell their Bitcoin.

[Manna]

What do you mean exactly?
The topic is about the increase of USDT market cap, but you're asking about bullish market and the possibility of Bitcoin crash. 
Anyway, bullish season has been starting since the early of this year. You can see that Bitcoin has made a new ATH. I think it is very visible for everyone. Regarding the current big decrease of Bitcoin price, it is not so surprising due to many FUDs or bad news recently.

What I meant is that we are still in a bull market and those who have investments will prefer to be in Bitcoin because the possibility of its value increasing is high. However, stablecoins will gain momentum, so what will happen when the Bitcoin price starts to correct and everyone wants to buy stablecoins and sell their Bitcoin.

Your statement is clear and makes an important point.  You say that even though we are in a bull market and the price of Bitcoin is likely to increase, some investors may invest in stablecoins to seek safety due to the current market volatility.

 Bitcoin is highly likely to achieve a new all-time high (ATH) price amid the current bull market, but a temporary drop in Bitcoin price is also not unexpected, especially due to the impact of FUD (Fear, Uncertainty and Doubt) and bad news.

 If the price of Bitcoin suddenly drops significantly and people start moving to stablecoins for safety, this could cause the market capitalization of stablecoins to increase.  However, in the long run, when the value of Bitcoin starts to recover, we may see a flow of funds towards Bitcoin again, which may lead to an exit from stablecoins.

 In short, the ongoing balance between Bitcoin and Stablecoin will depend on investor sentiment and market conditions.  Those who believe in Bitcoin may stay during that decline, but many may temporarily switch to stablecoins so they can buy Bitcoin after the price corrects.

[Aanuoluwatofunmi]

I may not say of other stable coins, but that of tether is more significantly felt because many are using it in their investments because they have seen it worth the value of standard required despite it equivalent with the USD standard, for now, i see it serving the purpose it was meant for because would have in one way or the other come across it demands along the way in their investment in cryptocurrency, so i wouldn't be more surprised seeing it that the market rises to this extent.

[Wiseman]

I think that there is nothing surprising here and this increase should be expected, if people demand then they are given more, as if this is very good news that Tether is increasing its volumes, which means more and more new users are coming to cryptocurrency and cryptocurrency is developing faster.

[B.Trader]

I think that there is nothing surprising here and this increase should be expected, if people demand then they are given more, as if this is very good news that Tether is increasing its volumes, which means more and more new users are coming to cryptocurrency and cryptocurrency is developing faster.

The number of Tether users and transaction volume is increasing in the cryptocurrency market.  In particular, the use of Tether on trading platforms is increasing because it is used as a stable currency, which helps to protect investors' capital.  Increasing the tether volume means adding more liquidity.  This means more people are staying in the currency and coming here to look for work.

[Wiseman]

I think that there is nothing surprising here and this increase should be expected, if people demand then they are given more, as if this is very good news that Tether is increasing its volumes, which means more and more new users are coming to cryptocurrency and cryptocurrency is developing faster.

The number of Tether users and transaction volume is increasing in the cryptocurrency market.  In particular, the use of Tether on trading platforms is increasing because it is used as a stable currency, which helps to protect investors' capital.  Increasing the tether volume means adding more liquidity.  This means more people are staying in the currency and coming here to look for work.

Cryptocurrency has been growing constantly and Tether adds new volumes every year, this year there have simply been a lot of airdrops that have become a very powerful boost for the entire crypto market, I think that is why the stablecoin market has reached a 2-year high.