The month of March saw Bitcoin register bullish returns on maps, with crypto hiking from over $45,000 on 1 March to a local high of $57,400 on the 10th. In particular, there was also a degree of cohesion between the on-chain fundamentals, with the funding rate returning to a healthier level over the period.
However, a noticeable trend has also been noticed recently, a shift that has attracted the interest of the world over the last 24 hours.
Tether supply dropped as Bitcoin touched $57,000
One of the predominant factors that have allegedly pumped Bitcoin in the past has been a decreasing supply on exchanges, i.e Tether. Data from Santiment suggested that the stablecoin supply dropped down to a 40-day low on exchanges.
To be honest, Bitcoin has become more unpredictable in terms of bullish/bearish feelings over the past 40 days, but the last 10 days have been steady, a timeframe over which the supply of USDT has continued to plunge.
Here, it is important to note that Tether continues to dominate Bitcoin volumes, with 58% of the capital flowing into BTC over the past 24 hours firmly under USDT’s control.
A new stablecoin on the rise?
If the chart shown by Santiment is closely followed, it can be seen that the availability of USDT has been steadily declining since the first week of February itself. Around the same time, the USDC was making headlines on the industry. AMBCrypto recently announced that USDC transactions posted a 13.5 per cent week-over-week hike after their market cap hit the $9 billion mark.
On 1 January, its supply amounted to more than $3.40 billion.
With respect to distribution, a stark difference can also be drawn out between USDT and USDC. In a recent CoinMetrics report, the Supply Equality Ratio or SER of USDT and USDC was compared, with USDT issued by ETH recently registering a fall in distribution too.
Under the same light, the SER value of USDC has exploded since January 2021, a finding indicative of the fact that USDC is getting widely distributed among addresses at the moment. The Coinbase-backed stablecoin is touching significant adoption levels and it can be speculated to be one of the reasons behind a stable Bitcoin price.
Can USDT’s decline impact BTC?
The Tether FUD was relatively cleared up recently when the NYAG-Bitfinex situation was brought to a standstill. In spite of this, the present rally suggests that the BTC bull run has become more spontaneous and has not really depended on one cause over the last 6 months.
Although USDC may be leading to a change in popularity, bridging the distance between itself and USDT, there is little danger to Bitcoin’s valuation for the time being.
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