Tether Market Cap Crosses $30 bn After Tesla Announcement

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Coinmonks

4 min readFeb 16, 2021

In a little over a year, the Tether market cap doubled from $15 billion to $31 billion as corporate and retail investors flood into bitcoin and crypto in search of an inflationary hedge against infinitely available cash.

Today, both Bitcoin and Ethereum are on the precipice of another major move.

Let’s dig in.

Tether market cap crosses $30 billion after Tesla announcement

Institutional and corporate investment has propelled Tether (USDT) inflows significantly higher, pushing the stablecoin’s market cap well beyond the $30 billion milestone.

In fact, the USDT market cap currently sits at $31.9 billion, with Tether taking 3rd place by market cap in the entire crypto space, per figures from Coingecko.

Notably, the surge in USDT inflows came a day after Tesla CEO Elon Musk announced a $1.5 billion investment in bitcoin.

Musk’s open bitcoin advocacy as a hedge against fiat currency inflation carries no small amount of weight given his far-reaching ties to the corporate world.

While already interested in bitcoin personally, Musk might have drawn inspiration for Tesla’s corporate investment strategy from Microstrategy’s CEO Michael Saylor after a brief conversation on Twitter.

Before this, Saylor found himself compelled to delve into bitcoin in order to hedge against inflation following record increases in the supply of US Dollars due lockdown-stimulus relief programs.

Since September, USD Tether in circulation has doubled from $15 billion to nearly $32 billion and counting, as demand for the stablecoin increases unabated.

Historically, stablecoin inflows have been a indicator for a bull-run’s health, and are often used among a basket of market tools for bitcoin price modelling.

Still, concerns about Tether’s 1:1 USD reserves backing persist and have not stopped speculation on a supposed ‘Tether-Bitcoin’ relationship, which is often confused with ongoing iFnex litigation.

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Technically speaking

Does this Ethereum fractal have legs?

Over the weekend, we released a blog post detailing why the bitcoin bull run is on the precipice of another move higher, while also drawing attention to on-chain indicators which suggest that the market could temporarily become frothy after this next potential move.

Since the crypto-market typically moves in relative unison, however, it’s worth paying attention to ETH/USD bearing in mind that the ETH/BTC pair transitioned into a bull-phase that started in December 2020.

As detailed in the Telegram channel, Ethereum witnessed a sell-off which took the price down to $1660 before price sharply corrected back above $1830 — where it currently trades (at the time of writing).

During the mass liquidation event, over $150 million leveraged long positions were liquidated and funding rates returned to normal levels shortly thereafter.

ETH immediate levels to watch

$2,000 psychological resistance level
$1,870 resistance (possible momentum long opportunity)
$1,750 LTF pivot/support level

At any moment, Ethereum could snap above the $2,000 price point, the same way bitcoin could snap to $54,000 as detailed over the weekend.

Needless to say, just because on-chain and technical data offer confluence does not mean certain cryptocurrencies ‘have to’ perform, nor does past performance necessarily dictate future behaviour.

However, mass liquidation events and on-chain data can contextualise buying and selling behaviour as this crypto bull run transitions into a market with greater retail participation.

As always, bulls lead the way.

Catch you next time.

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