Rapid Growth in USDT Supply and Decline in Dominance Might Propel the Next Crypto Upturn
Crypto Market Nearing New Bull Run? Tether's Skyrocketing Market Cap and Declining Dominance Indicate Potential Buying Power
We're on the verge of a new crypto bull run, as the total market cap inches closer to its all-time high (ATH). Leading the charge is Tether (USDT), the top stablecoin, which has shown promising signs of potential buying power in May [1].
Data from CoinMarketCap indicates that Tether's market cap has reached a new all-time high, exceeding $151 billion [1]. Yesterday, Tether injected a staggering $1 billion USDT into the market, part of the $2.5 billion USDT issued in May alone [1]. This surge has caused USDT's market cap to explode by nearly 10% since the beginning of the year.
Analyst Axel Adler Jr. noted, "Over the past 20 days, $6 billion in cash has been injected into the market through newly issued USDT. Tether's current market capitalization stands at $150 billion" [1]. As of now, USDT accounts for 62.4% of the total stablecoin market, further solidifying its dominant position [1]. Notably, the amount of USDT issued on the TRON network has surpassed $73 billion, making TRON the reigning king of USDT distribution [1].
The escalating market cap of USDT serves as a telling sign of impending buying power. As USDT's capitalization increases, a sizable amount of capital is primed to be deployed into other crypto assets. Even if prices dip, the market could swiftly recover due to the influx of oncoming capital.
Another positive sign is the decline in the USDT Dominance index (USDT.D), which measures USDT's market share relative to the total crypto market cap. Data from TradingView shows that USDT.D has plummeted from 6% in April to 4.6% at the time of writing [1]. This decrease indicates that investors are swapping their USDT for other crypto assets such as Ethereum (ETH) or altcoins [1].
When Bitcoin dominance (BTC.D) decreases, while Ethereum's (ETH) market share expands, it implies that part of the USDT flow is moving into altcoins [1]. This activity reflects a bullish sentiment in the market, as investors appear more willing to shoulder risks in search of higher returns than keeping funds in stablecoins as a safe haven.
Analyst Cryptosahintas offered more in-depth insight by studying both USDC.D and USDT.D indices. He believes the combined ratio will dive even further, contributing to Bitcoin's forthcoming bullish wave [2]. "The dominance of Tether is waning. I anticipate Bitcoin to continue its ascension. Liquidity is gradually shifting toward riskier assets," Cryptosahintas predicted [2].
While Tether's growing market cap and dwindling dominance signal a possible new bull run, historical data shows a lag in effects. From January to April, Tether's market cap grew from $137 billion to $144 billion, yet Bitcoin's price still tumbled from $110,000 to under $75,000. This discrepancy challenges precise predictions and highlights the challenges of interpreting real-time market signals [2].
Diving Deeper:- Increased on-chain activity and rising exchange outflows indicate holders are amassing rather than dumping—a bullish sign for price surges [3].- Technical signals such as RSI bouncing from oversold levels and funding rates turning positive reflect growing trader confidence and a shift towards long positions—symptoms historically aligned with the beginning of bull markets [3].- Renewed interest in early-stage and low-cap projects—particularly those linked to AI and memecoin trends—indicates speculative investment is resurging—a common characteristic during the early stages of bull phases [3][4].- Improving macroeconomic conditions—such as dwindling inflation fears and booming risk appetite—develop a more conducive environment for crypto investments [3].- The current Bitcoin cycle's duration and metrics like the 2-Year Rolling MVRV-Z Score point to potentially hundreds of days of upward momentum remaining—supporting a generalized bullish atmosphere impacting stablecoin flows like USDT [2][4].
Trust Project guidelines promote unbiased, transparent reporting. This article aims to provide accurate, timely information. However, readers should independently verify facts and consult with a professional prior to making decisions based on this content. Our agreements, privacy policy, and disclaimers have been updated for your peace of mind.
Stay informed and trade wisely with trusted platforms:
- eToro: Early access to new tokens, one-step trading, multi-asset support
- YouHodler: Secure borrowing, crypto-backed loans, savings accounts
- Arkham: Research platform, news, analysis, and market data insights
- Wirex: Crypto debit card, seamless spending, rewards, and savings
- NEXO: Instant crypto credit lines, instant exchange, and perks for hodlers
- eToro | YouHodler | Arkham | Wirex | NEXO
DisclaimerIn accordance with the Trust Project guidelines, BeInCrypto is dedicated to fair, open journalism. Our purpose is to deliver accurate, up-to-date information. However, readers are encouraged to independently verify facts before making decisions based on the information provided in this article. Additionally, please consult with a professional regarding the information found within this content before making any financial or investment moves. Please note that our agreements, privacy policy, and disclaimers have been updated for your convenience.
- Tether's soaring market cap, which recently surpassed $151 billion, is a clear indication of potential buying power for other cryptocurrencies, as we approach a new crypto bull run.
- The recent injection of $1 billion USDT into the market by Tether, part of the $2.5 billion USDT issued in May, has contributed to a 10% increase in Tether's market cap since the start of the year.
- As Tether's capitalization rises, a sizable amount of capital is set to be deployed into other cryptocurrencies, potentially leading to a swift market recovery, even during price dips.
- The decline in the USDT Dominance index (USDT.D) indicates that investors are starting to swap their USDT for other cryptocurrencies like Ethereum (ETH) or altcoins, showing a bullish sentiment in the market.
- As Bitcoin dominance (BTC.D) decreases while Ethereum's (ETH) market share expands, signs point to some of the USDT flow being moved into altcoins, a common characteristic during the early stages of bull phases.
- Analyst Cryptosahintas predicts that the decrease in Tether's dominance will lead to Bitcoin's continued ascension, with liquidity gradually shifting towards riskier assets.
- Each bull run cycle has its unique characteristics, including improved macroeconomic conditions, increased on-chain activity, and renewed interest in early-stage and low-cap projects.
- The prolonged duration and specific metrics of the current Bitcoin cycle suggest potentially hundreds of days of upward momentum, further strengthening the case for a generalized bullish atmosphere impacting stablecoin flows like USDT.
