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USDT market cap surges as fiat capital flows into crypto

USDT market cap surges as fiat capital flows into crypto

Tether USD (USDT) is the leading stablecoin in the cryptocurrency market and acts as the main fiat ramp to cryptocurrencies. USDT’s high liquidity and adoption as a fiat ramp make it an important indicator of overall interest in crypto.

Anticipating a remarkable bull run in the last weeks, USDT saw a massive increase of $1.59 billion in market capitalization in a month. Moving from a $83.43 cap on October 3 to a $84.93 market cap on November 2.

Notably, the 24-hour registered volume also increased from $32.69 billion to $45.41 billion at the time of publication.

Tether USD (USDT) 1-month market capitalization.
Tether USD (USDT) 1-month market capitalization. Source: CoinMarketCap

Interestingly, last week’s surge was one of the most meaningful capital inflow to Tether USD in the period. USDT market cap increased by more than $500 million in the last seven days, for 31% of this month’s inflow in dollars. The volume benchmark also indicates a more liquid market by press time than it was one week ago.

Tether USD (USDT) 1-week market capitalization.
Tether USD (USDT) 1-week market capitalization. Source: CoinMarketCap

USDT main fiat on-ramp and off-ramp

Essentially, a market cap increase to USDT during a bull rally usually means that money is coming from fiat and traditional finance to crypto. Cryptocurrency traders and investors, being retail or institutions, use Tether as the main fiat on-ramp in the market.

Nevertheless, a USDT market capitalization surge during an overall price drop usually means the opposite. As it indicates, crypto investors could be selling their coins with the intention to off-ramp back to fiat and to traditional finance.

All things considered, Bitcoin (BTC) is trading in a consolidation range, some altcoins have broken out from historical downtrends, and the total crypto market capitalization is at yearly highs, superior to $1.28 trillion. This indicates a capital inflow to cryptocurrencies and an uptrend continuation.

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