In the previous year, China has a made a decision to ban every local fiat-on-ramps regarding the crypto exchanges and Chinese traders are successfully improving the market with the help of the USDT, which happens to be a dollar-pegged stable coin Tether. Usually, traders deal with banking restrictions with the assist of the stablecoins. CoinMarketCap has reported that the USDT hit an all-time high this August. It has successfully exceeded the global market cap of a massive $4 billion. In the reports, it is written that the USDT is used somewhere in between 40%-80% of basically every transaction, particularly on the popular exchanges such as Binance and Huobi. Currently, Binance offers loans which happen to be based on the collateral of Tether.
This asset is extremely popular with the so-called over-the-counter traders, but it is fair to say that the exchange volumes don’t really depict the whole current situation. Blockchain data from CoinMetrics has detected an all-time high this year on the 7th of August. There were over 78000 wallets for the Tether and over 21000 wallets for USDTe, which is based on Ethereum. USDT has spent a whopping amount of $261000 in fees to ETH mines in order to get permission to run this lower-level version of the stablecoin.
When you look at everything, the Tether brokers have established a fruitful niche in the year 2019, especially the ones who ensure flat liquidity. A Chinese investor said that the Tether has above-average liquidity in China. Also, two over-the-counter traders have said that the vast majority of their tractions happens to come from Chinese clients, who use Tether to move their personal assets far beyond their homeland’s capital controls, which are quite strict.
Experts say that this recent burst in USDT usage might be the fact that there’s a fair chance for a bull market return. The over-the-counter traders ensure the before-mentioned fiat-on-ramps to Tether. This has been known to be a gray market in China. The next step for the Chinese traders would be to use Tether in order to liquidate their portfolios on global exchanges such as Binance for example. This has really made an impact on the Bitcoin market because exchanges and traders often use the Bitcoin for fiat liquidity beyond the over-the-counter. Bitfinex and Kraken offer those BTC trading pairs.
A Hong Kong trader has said that billions of dollars come out of the borders of China that are not related to capital controls. For instance, the FTX crypto market in Antigua that was established in April 2019 facilitates $50-$300 million on a daily basis. The CEO Sam Balkman-Fried told that the boost 10000 FTX users hail from China, and every last one of them is served from Hong Kong.
The asset’s solid stability this year, oscillating only a couple of cents this month despite the fact that the spike in demand seems quite incredible given the fact that this particular stablecoin isn’t really backed one-for-one by USD. Also, the sister company, Bitfinex, is in legal trouble from misuse of Tether to cover some substantial losses of the company.