USDT total supply hits $83.5 billion as bear market pushes users to the leading stablecoin

Tether (USDT)
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Since 2017, whenever the crypto market suffered a bearish period, crypto users had a choice to either cash out or convert their coins and tokens into stablecoins like Tether (USDT). Thanks to the fact that USD backs USDT, its price is fixed, so it does not get affected by the volatility of the bear and bull markets.

Over the years, many more stablecoins were launched, but despite its past controversies, Tether never lost its dominance. Even now, in 2023, the prolonged bearish crypto market is pushing users toward USDT while other cryptocurrencies trade in the red. In fact, the demand has been so great that Tether had to increase its supply, which hit $83.5 billion earlier this week.

This made its total supply near its all-time high of $84.1 billion. Tether previously reached this level last year, in 2022, while the crypto winter was at its strongest point.

okex

USDT supply is near its ATH

After an initial price recovery in early 2023, the crypto market entered a sleepy period, which caused USDT to perform much better than the rest of the market.

Interestingly, the project’s supply previously reached its ATH almost exactly a year ago, on May 10th 2022. According to data from The Block, the project hit $83.5 billion supply on Monday, May 20th, with only 10 days difference between the two.

Tether’s comeback happened due to the back drop of a somnolent market, which found itself under heavy pressure from macro headwinds and the constant regulatory uncertainty in the US. During the recent decline in trading activity and another drop of crypto prices when everyone hoped that the bear market has ended, users turned to stablecoins to protect the value of their investments.

Tether grows while Circle’s USDC gets its supply cut in half

Tether performed much better than other stablecoins. For example, its largest rival, USDC, saw a decline of its supply, going from $47 billion to $27.8 billion. This impacted its rank, but ultimately, it was great news for Tether.

Data provider Kaiko believes that the rise of USDT is not tied to an increase in trading volumes. The company said, “The data doesn’t show any notable increase in USDT market share (as measured by trade volume) relative to other stablecoins over the past few months, largely due to Binance’s promotion of TUSD as an alternative to BUSD.”

The firm also noted that the growth of Tether’s supply might be tied to offshore trading among market-making companies and crypto whales. Kaiko noted that a lot of USDT was issued on Tron, given its minimal DeFi activity. Further, the largest exchanges like Coinbase do not even support it. Meanwhile, offshore platforms like OKX and Bnance have the largest USDT balances on Tron’s network.

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