- Tether treasury received two $59M USDT lump sums from Bitfinex only a few minutes apart on Oct. 2nd, 2023.
- These transfers have happened despite the general contraction in the stablecoin market since November 2022.
- Tether has continued to dominate the stablecoin market, and these transactions may entice investors towards purchasing the asset.
Despite experiencing a period of decline since November 2022, two large transactions of $50 million each have been pumped into stablecoin only minutes apart. The transactions have been transferred from Bitfinex to the “Tether Treasury” address, according to transfer receipts from Whale Alert.
Both trades happened two minutes apart On October 2, 2023. At 9:43 a.m. UTC, the first 50 million USDT lump sum transaction valued at $50,039,125 took place. The second, for $50,038,875, was at 9:45 AM UTC.
A stablecoin is a type of cryptocurrency that is designed to maintain its value by pegging its price to a stable asset like a fiat currency like the US dollar or a commodity like gold.
According to Coinmarketcap, tether USDT is the largest stablecoin by market capitalization, at $83 billion market cap, followed by USDC and Dai closing the top three.
History with Federal Reserve
This comes as the Federal Reserve in the United States, a place that has already had a rocky relationship with stablecoins, on Sept. 28 called the assets a potential “source of financial instability.”
According to Reuters, mainstream companies have tried to launch stablecoins before, but have been met with fierce opposition from financial regulators and policymakers for example Facebook (Metaverse), tried to launch a stablecoin in 2019 but was met by opposition.
But on August 8th, the US Federal Reserve announced to the banks it was supervising that it was creating a new supervisory program to oversee the activities for them relating to cryptocurrency, blockchain technology and tech-driven nonbank partnerships, with the aim of complementing its existing supervisory process and strengthening the oversight of tech-driven activities. This came just days after payment giant PayPal announced the launch of its own stablecoin even as Tether announced a partnership with private banks on September 1st and a partnership with the Government of Georgia on September 28th.
Stablecoin was widely mentioned in the Securities and Exchange Commission (SEC) vs. Binance lawsuit with stablecoin issuer Circle (USDC) arguing that stablecoins are not securities.
According to knowledge platform Datawallet;
The stablecoin market cap was $125.4 billion, a 24.5% decline from the previous year. Tether (USDT) seemed to have been the only stablecoin which held the fort, The most likely reason for the overall decline was outflows of Binance USD (BUSD) which dropped 82.73% after issues Paxos was sued in the United States.
Despite the overall contraction in market cap, stablecoin has increased dominance compared to the total crypto market cap, because it grew by approximately 7% as of January 2023.
Prior to the collapse, stablecoin holdings on cryptocurrency exchanges reached a new all-time high (ATH), as currencies like (USDT) poured in.
A market intelligence platform Santiment posted on X the following comments;
“Tether sharks and whales are accumulating buying power. This is generally a bullish combination”. Some users in X are calling the new large transactions a “pump” with the aim of enticing investors towards purchasing that particular stock.
Tether, the largest stablecoin issuer in the crypto market, saw a rise in its stablecoin lending or secured loans according to news in the Wall Street Journal (WSJ) in September.
It is a wait-and-see situation, whether this will turn out to be an enticing “pump” for the investors.