Key Points
- Tether (USDT) dominates the stablecoin market with a 70% share, while Bitcoin (BTC) continues to lead the broader crypto landscape.
- High USDT dominance could potentially affect Bitcoin’s surge and dampen the momentum of major cryptocurrencies.
Tether, commonly known as USDT, leads the stablecoin market with an impressive 70% share at the time of writing. In the second position is USDC, holding a 20.8% share.
Stablecoins, with a total market capitalization of $168 billion, account for 8.2% of the entire cryptocurrency market.
Bitcoin and USDT: Dominating the Crypto Landscape
Just as USDT is the king of stablecoins, Bitcoin continues to be the most dominant player in the broader crypto market. These two cryptocurrencies play significant roles, and any major movements by either could impact the entire crypto world.
Bitcoin recently tested the $60,000 support level, but bulls couldn’t sustain the price. However, a crucial bullish push has elevated Bitcoin’s price to $60,941.
Correlation Between Bitcoin and Stablecoins
An analysis of data from the analytics platform Alphractal reveals a correlation between Bitcoin and stablecoins. Historically, an increase in stablecoin dominance has coincided with Bitcoin testing key resistance levels. This suggests that investors might be turning cautious, converting their holdings to stablecoins to shield themselves from Bitcoin’s volatility.
A high USDT dominance could potentially trigger a downward trend in Bitcoin’s price. As of August 9th, approximately 41 million USDT flowed out of exchanges, a significant increase from the previous day’s 35 million. If this trend continues, it might prevent Bitcoin from breaching the $62k resistance level.
Impact on Altcoins
The combined dominance of Bitcoin and all stablecoins stood at 65.2%, indicating low interest in altcoins. Despite Ethereum’s price surge beyond $2,600, the altcoin season index remained bearish.
Data shows that while Ethereum’s market cap decreased by 23.77% and Bitcoin’s by about 9% over the past month, the stablecoin market cap grew by 3.04%. This shift underscores a rising confidence in stablecoins, which could potentially dampen the momentum of major cryptocurrencies if it continues.
