Tether (USDT) Dominates Stablecoin Market Despite Treasury Size Shrinking

Recently, CryptoCompare, the global cryptocurrency market data provider published a study offering institutional and retail investors insights into the cryptocurrency exchange industry.

One of the observations made by the study is that Tether (USDT) continues to represent the majority of Bitcoin trading into fiat or stable coins at 65% of the total monthly volume in December. In December, the proportion of Bitcoin trading into Tether increased 16.5% since November.

Pairs trading from USDT represent the largest markets for stable coins with PAX representing the majority of trading volume in December at 75% of the total monthly volume. USDT trading into PAX increased by 70% since the previous month.

December, two competitors to Tether (USDT) have made small inroads into its dominant position in Bitcoin trading. From near-enough 100% of the market in October 2018, USDT has slipped to 98% of market share with two contenders vying for second place. This is despite Tether long being the subject of controversy.

In November 2018, in response to concerns about its viability, Tether went as far as publishing a letter from Deltec Bank apparently showing its reserve balance. Exchanges have even indicated their wish to move away from USDT, with Binance announcing plans to offer a basket of stable coins in its place.

Treasury Balance Shrinking

Tether treasury continues with regular daily withdrawals, with the funds split into tranches of different sizes. These actions have quickly depressed the Treasury balance to around 493 million USDT.

One of the biggest tranches (14,985,000 USDT) passed through an intermediary address and was then injected into a Kraken address. What started as tentative transactions turned into a regular inflow of coins in recent weeks, with tranches growing in size.

The Treasury held over 750 million USDT around October 2017 after the coin’s liquidity shrank dramatically. But in the following months, a significant percentage were put back in circulation, initially directly through Bitfinex.

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