" class="no-js "lang="en-US"> Bitcoin Price Holds, USDT Increases Its Stablecoins Dominance
Tuesday, April 16, 2024

Bitcoin Price Holds, While USDT Increases Its Stablecoins Dominance

Matteo Greco, Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International explains some of the trends in cryptocurrency, May 2023.

Bitcoin (BTC) closed last week at about $26,750, a 0.5% decrease in price compared with the previous week. The 7-day moving average of active addresses on the Bitcoin network dropped to 754.52k, the lowest since July 2021. The impact of BRC-20, tokens that confirm transactions on the BTC blockchain, remained strong. BRC-20 tokens are responsible for 26% of BTC network transaction fees.

BTC activity recently surged due to the growing use of ordinal inscriptions, which are used to create BRC-20 tokens that can be deployed on BTC blockchain following the Taproot upgrade and have seen a rise in activity since mid- April.

On a year-to-date basis, Bitcoin spot volume increased in emerging markets and Japan, while a decrease had been recorded in the European, United Kingdom and US markets. BTC supply stored on exchanges dropped below 12% for the second time during 2023, still showing fear among investors amid multiple bankruptcies that affected crypto businesses and banks.

USDC, the stablecoin issued by Circle, witnessed a negative trend, after it was hit by a contagion of U.S. banks, as supply shrank from 47 billion to less than 30 billion in just over 60 days. Issues related to other major stablecoins worked in favour of Tether, the firm behind the USDT stablecoin. It announced a record net profit of $1.48 billion in Q1 and currently shows a 64% dominance in the stablecoins market cap.

Starting this month, Tether will regularly allocate up to 15% of its net realized operating profits towards purchasing Bitcoin (BTC). Tether also claims to have drastically reduced its liquid component in banks from $5.3 billion to $483 million in Q1 2023, to avoid exposure to possible further bank contagion.

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