On-chain data shows that Tether (USDT) sharks and whales have grown rapidly since Bitcoin’s volatility began.
Tether Sharks & Whales grow businesses as USDT exchange supply falls
This is evident from data from the on-chain analytics company Sanitation, these major Tether holders now carry a total of $16 billion in stablecoin. The relevant indicator here is the “USDT Supply Distribution” which tells us how the Tether supply is currently distributed among the different holder groups in the market.
Investors or addresses are divided into these holder groups based on the total number of coins they currently hold. In the context of the current discussion, the main cohorts “shark” and “whale” are of interest, whose combined coin range can be defined as $100,000 – $10 million.
Naturally, this holder group includes all addresses on the blockchain that have at least $100,000 and up to $10 million in USDT in their balance.
Here is a chart showing the trend in the Tether Supply Distribution specifically for the sharks and whales over the past six months:
The value of the metric seems to have sharply gone up in recent days | Source: Santiment on Twitter
As shown in the chart above, Tether addresses with between $100,000 and $10 million have seen their combined supply increase recently. Interestingly, this increase coincided with Bitcoin experiencing some high volatility as Binance was sued by the SEC for alleged fraud.
In general, investors use stablecoins like USDT when they want to exit volatile coins like BTC. So investors trading their assets for stables could be a sign of selling.
It is possible that the latest surge in shark and whale landings is a result of these giant holders dumping cryptocurrencies like Bitcoin in these uncertain times.
However, when holders opt for stablecoins rather than exit through fiat or other means, it usually means they may be looking to eventually return to the volatile markets.
When such investors finally feel that prices are right to step back into the other coins, they shift their USDT to their preferred asset, creating buying pressure on the price.
For this reason, stablecoin supply can be viewed as the available purchasing power for assets such as Bitcoin. As the sharks and whales have loaded onto Tether and pushed their supply to a new all-time high of $16 billion, the potential dry powder for BTC has also risen.
It is not known when these giant holders will finally be able to get back into the cryptocurrency, but when they do, it is likely that the price will feel a bullish boost.
The data for the exchange supply (i.e. the amount held in exchange wallets) of Tether is also shown as increasing on the chart. It seems that this stat has been rising as the sharks and whales bought, implying that the coins coming off these platforms are being picked up by these cohorts.
BTC price
At the time of writing, Bitcoin is trading around $26,600, down 2% over the past week.
Looks like the value of the asset has been moving sideways recently | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Santiment.net
