Significant Transfers Stoke Up Stablecoin Debate Amid Drop in Reserves and Rising Tether Loans
Summary:
This news covers the recent transactions made on October 2, 2023, involving two transfers of 50,000,000 USDT each from Bitfinex to the Tether Treasury. It includes data insights from CryptoQuant revealing the steady fall of stablecoin reserves in exchanges since November 2022. The commentary discusses the recent market conditions, identifying a potential 'pump' trend due to the massive transfer. It also covers the stance of the U.S. Federal Reserve on stablecoins and their increasing debate in ongoing lawsuits within the crypto industry. Finally, it highlights the surge in Tether-based loans throughout 2023.
As per the transaction records shared by Whale Alert, two movements of 50,000,000 (USDT) each were shifted out of Bitfinex to the Tether Treasury. The transactions occurred on October 2, 2023, separated by a mere two minutes. The first sizeable transfer of 500,000,000 (USDT) happened at 09:43:23 UTC and was valued roughly around $50,039,125 USD at that time. The second transfer at 09:45:03 UTC was approximately worth $50,038,875 USD.
Data analysis from CryptoQuant reveals a consistent decrease in stablecoin reserves within exchanges from around November 2022 onwards. Prior to this drop, the start of 2021 witnessed a record all-time high of stablecoin reserves on cryptocurrency exchanges, primarly driven by influx of coins like (USDT).
Observations on the unfamiliar market conditions have sparked reactions from the crypto enthusiast community, labeling this event as a potential "pump," referring to boosting a stock or a particular token to attract investors. However, a statement by the market intelligence platform Santiment on Sept. 29 mentioned an enhancement in the buying power of Tether “sharks and whales,” calling it a "generally a bullish combination.”
Related: Singapore customers reportedly unable to redeem USDT, alleges Tether
As per Cointelegraph’s own research, a continuous decline in stablecoins has been witnessed for 17 months as investors head towards traditional assets.
Concerns about stablecoins have been raised, with The Federal Reserve in the United States remarking them as a possible “source of financial instability” on Sept. 28. They have pointed out that evidence shows, "stablecoins are susceptible to serious disruptions during wide-scale upheavals in the crypto market and during independent stress events.”
Stablecoins have become a prominent discussion point in ongoing lawsuits tormenting the crypto industry. In the case of the Securities and Exchange Commission (SEC) vs. Binance, the stablecoin issuer Circle (USDC) made a defense that stablecoins are not securities.
In spite of everything, Tether observed a surge in Tether-based stablecoin loans throughout 2023. Featured: Blockchain detectives emerge after Mt. Gox collapse leads to Chainalysis creation.
Published At
10/2/2023 2:03:30 PM
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