How will USDT’s growth impact Bitcoin [BTC]? According to this data….
- Tether invested a large portion of profits into BTC.
- However, BTC miners got skeptical.
After the collapse of the Silicon Valley Bank (SVB), Tether’s [USDT] biggest competitor, Circle [USDC], got impacted severely. Due to the FUD caused by this, USDT could capture a large amount of market share in the stablecoins sector.
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As the overall profits generated by Tether, its parent company, skyrocketed, much of these earnings were allocated to buying U.S. treasury bills. However, there were other avenues where Tether invested. A huge amount of their earnings were invested in Bitcoin [BTC].
According to the data, Tether has $1.5 billion worth of BTC held in its reserves.
In Q1 alone, Tether acquired 52,670 BTC. If Tether continues to dominate the stablecoin market, there could be positive implications for BTC’s price.
Inasmuch, Andrew Kang, CEO of Mechanism Capital, a crypto investment firm, stated that if Tether continues to buy BTC with their profits, it could undermine the selling pressure on BTC that would occur due to U.S. government’s holdings.
At press time, the U.S government held large sums of seized Bitcoin that it is planning to sell in four phases throughout the year.
The U.S. government’s decision to sell these holdings has caused massive amounts of FUD in the market, with many traders believing that these sell-offs could drive down the price of BTC.
However, if Tether continues its bullish behavior, there may be a possibility that the impact of U.S government’s actions could be negated in the future.
HODLers remain calm
At press time, there wasn’t a lot of selling pressure on Bitcoin, as addresses in profit had declined and reached one-month lows. This indicated that many addresses currently holding BTC did not have a large incentive to sell their holdings.
📉 #Bitcoin $BTC Number of Addresses in Profit (7d MA) just reached a 1-month low of 31,167,820.077
View metric:https://t.co/qLnvDYVzPt pic.twitter.com/zVTHt6mrKV
— glassnode alerts (@glassnodealerts) May 14, 2023
Read Bitcoin’s [BTC] Price Prediction 2023-2024
Even though BTC addresses continued to HODL, Bitcoin miners did not exhibit the same behavior. According to Glassnode’s data, Bitcoin’s miner outflow increased. This behavior showed that many miners could face high amounts of selling pressure and have sold their holdings.
There will be a negative impact on BTC if this behavior from miners continues.