Posted 12 months ago | by Ben Armstrong

$1 Billion USDT is Sitting at Binance: Hedge Fund

Tether’s USDT stablecoin has become increasingly important to the crypto market over the past few months. Binance has a huge amount of USDT at the moment. The asset’s market capitalization has shot up substantially as it has gained wider acceptance. It currently created a great deal of Ethereum’s network traffic.

Data shows that Binance is now holding a large amount of USDT. The US dollar, which is the base of USDT's value, is seen as a safe haven in times of market stress. Many crypto investors were shocked when Bitcoin dropped in price more than a month ago, and many may be looking for a more stable token.

Jason Choi, a Wharton School graduate as well as the Head of Research at crypto hedge fund 'The Spartan Group', shared the data that suggests that there is currently around $1 billion USD worth of Tether, “sitting on the sidelines on Binance alone.”

This doesn’t include other stablecoins, such as Binance USD, USD Coin, Paxos Dollar, and more, that platform supports. If you want to trade with Binance, or would like to learn more about the tools that it offers, please click right here. It is one of the biggest exchanges in the world, and has a great trading platform.

Binance has a Pile of USDT

The massive growth in USDT and other stablecoin balances at Binance took place after the “Black Thursday” crash in the price of Bitcoin and other cryptos. The growth in the amount of USDT at Binance signals a rapidly growing level of latent demand for cryptocurrencies. When buyers reemerge, the moves higher in non-stablecoins could be swift.

While the crash in crypto prices was quick, the growth of Binance’s USDT was relatively steady and was not marked by large spikes indicative of a direct deposit by Tether.

Since the past few weeks have seen a broad resurgence in the total value of stablecoins in existence, it isn’t only USDT that has experienced extreme growth.

Nic Carter from CoinMetrics pointed out that the total value of these assets has been grown during a steep rally.

“Stablecoins collectively tacked on over $2b in March 2020 – by far their best month ever. Nontether stablecoins grew by $500m.”

Stablecoins May be a Signal

To date, the value of all stablecoins has passed $8 billion USD, or approximately 4.2% of the entire public crypto market. A rapid rally higher in the crypto market will happen at some point, but it is difficult to known when the danger of the global financial panic will have passed.

Su Zhu, who is CIO, and CEO at hedge fund Three Arrows Capital, said:

“There's an estimated $2B in cash sitting at crypto funds/holds. There's another $2B plus sitting in stablecoins, and another $2B sitting at exchanges/silver gate/signature. Imagine thinking we need new money to hit $10k.”

For the moment, the situation in both the established financial markets, and the crypto markets remains in flux. Although Bitcoin prices have rebounded, they remain below the highs set in February of this year.

For more information about how to get started trading cryptos with Binance, please click right here. You can buy a range of tokens on the exchange, and also trade cryptos against fiat currency proxies, like USDT!