USDT inflows surged during recent BTC price dip.
The unusually high capital inflows likely stemmed from margin calls and bargain hunting.
What to know:
A week ago, bitcoin (BTC) crashed to nearly $91,000 as trade war fears gripped the market. On the same day, centralized exchanges registered a net inflow of $2.72 billion in tether (USDT), the world’s largest dollar-pegged cryptocurrency by market value, according to analytics firm IntoTheBlock.
“The market’s substantial downturn triggered unusual capital flows. Notably, USDT netflows into exchanges reached the third-highest level ever recorded, exceeding $2.72 billion (on Ethereum alone),” IntoTheBlock said in the weekly newsletter.
“This surge likely resulted from a combination of factors: traders depositing additional collateral to manage margin calls and prevent liquidations on underwater positions, alongside significant “buy-the-dip” activity, particularly focused on BTC,” the firm added.
Bitcoin has since steaded between $95,000 and $100,000, CoinDesk data show. Tether and its regulated rival, USDC, are widely used to fund crypto purchases.
