The market capitalization of Tether (USDT) has been mostly stagnant since August of 2019. However, yesterday the unexpected happened: out of nowhere, the market capitalization of USDT increased by $500M on CoinMarketCap. Needless to say, everyone was confused. In just five minutes, Tether’s market capitalization increased from $4.14 billion at $4.65 billion. Tether’s treasury, however, showed no change to its total assets. CoinMarketCap was also apparently the only one to make this sudden update. CoinGecko, a competitor, kept Tether’s market capitalization the same.
So, it’s clear that this was merely CoinMarketCap updating their metrics and not fresh USDT being minuted. However, it was enough to set off the bots—and Bitcoin (BTC) proceeded to rise just shortly after CoinMarketCap’s update. Even though CoinMarketCap’s update was not based on new USDT entering the market, cryptocurrency traders certainly interpreted it as such. At 11:54 UTC, CoinMarketCap increased Tether’s market capitalization by $500M. Around 5 hours later, at 17:00 UTC or so, Bitcoin began its upward ascent from $7,600 to $7,950 by 19:54 UTC.
Overall, the circumstances of Bitcoin’s rise yesterday shows just how dependent it is on Tether (USDT) for its rallies as of late. As BeInCrypto previously reported, around 70% of Bitcoin rallies were correlated strongly with fresh USDT minting. It seems clear that algorithmic bots picked up on the increased USDT market capitalization and took it to be a definite buy signal, despite no new UDST being issued at all. This just underscores how robot-dominant the cryptocurrency market has become and how even basic market data can be used to manipulate trading.
Bitcoin Increase Driven by $500M Rise in Tether’s Market Capitalization, Beincrypto, Jan 9
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