The stablecoin Tether (USDT) supply has been flat since the beginning of June.
Tether CTO Paolo Ardoino told The Block that demand for USDT has been impacted by a “significant drop” in open interest for Bitcoin futures.
The supply of stablecoin Tether (USDT) has been flat since the beginning of this month, according to The Block’s Data Dashboard. From June 1 to June 17, the supply of USDT remained at $64.25 billion. The absence of any growth in USDT indicates that there is currently no demand for stablecoins in the market and no influx of new money.
Tether CTO Paolo Ardoino told The Block that demand for USDT has been impacted by the “significant drop” in open interest on Bitcoin futures in recent weeks. He also added that USDT is the “dominant stablecoin” on most crypto derivatives exchanges.
Indeed, there has been a notable drop in the total open interest of bitcoin futures since mid-May. From a peak of over $20 billion in May, the amount of open interest fell to about $13 billion as of June 18. Open interest is the value of derivative contracts that have not yet been paid. Increasing open interest means new money is flowing into the market and vice versa.
The recent bearish trend of the crypto market seems to be the main reason for the low amount of open interest in the bitcoin futures market. Bitcoin suffered a serious drop from $64,000 in mid-April. Ardoino told The Block that stablecoins are issued according to market conditions and therefore its supply fluctuates.
Indeed, as can be seen from the first chart above, the supply of not only USDT but also other stablecoins stabilizes in June.
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