Exchanges are holding more of Tether's USDT. The 7-day moving average of the change in USDT held by exchanges reached $568 million earlier this month, the highest it's been in a year. The moving average has remained positive since the start of February, indicating consistent growth of exchanges’ USDT holdings.
Exchanges’ USDT balances tend to grow either when more people are holding the asset on the exchange or if more traders want to sell the asset than buy it. USDT is the largest stablecoin by market cap.
It is likely that, in this case, many users are holding USDT in their accounts after selling during the turbulent past few weeks in the market. These traders might not have withdrawn their USDT yet, figuring out whether the market slowdown was short term and whether or not they would want to buy in again.
It does seem like in the tail end of last week we got some reprieve from the dip, as bitcoin climbed back to $65,000 on Friday after dropping below $60,000 earlier.
The moving average of the change in BTC held by exchanges has been climbing slowly after hitting a relative low earlier this month, which, in this case, could be caused by increased selling, with balances growing by over 6,000 BTC per day.
On the ETH side of things, the change in balance has been dropping after peaking at the end of March but still remains largely positive, growing by over 40,000 ETH per day, and again can likely be explained by the more recent slowdown in the bullish crypto rally.
While the exact reason for the more minuscule fluctuations in the changes of how much BTC and ETH is being added to exchange balances is hard to track, the huge surge in the growth of exchanges’ USDT balances does seem to fall in line with the end of many crypto assets’ strong upwards momentum.
This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry’s most thought-provoking trends.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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USDT's exchange balance hits highest level in a year and keeps rising - The Block
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