Why Tether (USDT) and TrueUSD (TUSD) whales are essential for the crypto bull rally?

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Bitcoin price hitting $27,000 caused markets to rise, which turned investor sentiment on its head. Accumulation seems to be a trend as stable whales begin to increase their gunpowder when dropped. Tether and True USD have become popular among investors due to the turmoil in the stablecoin ecosystem.

The collapse of US banks in 2023 put a strain on risky markets like cryptos and stocks. This caused a momentary spike in selling pressure due to the panic, which sent the markets plummeting. Judging from the current state, recovery crypto markets seem to be doing well against stocks and credit for that goes to the stablecoin ecosystem.

Also Read: Silicon Valley Bank and Signature Bank Hearing Set for March 29, FDIC Chairman to Testify

Banking chaos and crypto stablecoins

As summarized in a previously published article, the crisis began when the United States Securities and Exchange Commission (SEC) went after stablecoin issuer Paxos. The simultaneous collapse of US banks sent markets tumbling. But some things are inherently different in the crypto markets, i.e. the stablecoin ecosystem.

The $134 billion ecosystem is located not only in the United States, but around the world, which means that the short-term collapse of the American banking system is localized to only a few stablecoin issuers. Tether, the largest stablecoin issuer by market capitalization, and a few others like True USD (TUSD) showed no depeg, while others like USD Coin (USDC), Dai (DAI), Frax (FRAX) etc., saw the coins move away from their $1 peg.

On-chain analysis reveals that the comeback appears to be powered by two major stablecoins – USDT and TUSD. Tether added $2 billion in tokens last week, which were minted but not minted.

Read more: Tether minted $2 billion worth of stablecoins last week

Similarly, Binance, one of the world’s largest crypto exchanges by trading volume, converted $1 billion of its SAFU funds to TUSD AND USDT, signaling that these stablecoins are, for now, safe.

Read more: Binance pulls BUSD from its $1 billion SAFU fund and swaps it with USDT and TUSD

Stablecoin Whales Fueled March Rally

The supply distribution chart for USDT and TUSD shows a similar pattern, with the accumulation of whales holding between 100,000 and 10,000,000 coins.

The number of Tether whales holding 100,000 and 10 million USDT saw a massive spike, indicating that more investors are converting their stablecoins to USDT.

Specifically, USDT whales with addresses between 100,000 and 1 million saw a 13% to 15% spike between March 9 and March 18. Addresses between 1 million and 10 million USDT increased from 20% to 22%.

All signal indicates that these whales are ready with gunpowder to accumulate cryptos and trigger a surge.

For TUSD, whales holding between 100,000 and 1 million tokens have increased from 44 million to 50 million.

Supply Distribution Board

While the outlook for the broader market turned bullish after the price of Bitcoin hit $27,000, investors remain cautious amid troubling macro conditions. The bullish outlook is still uncertain, especially if the banking crisis worsens.

If Federal Reserve policy turns hawkish, it could trigger a rally in the US dollar, putting pressure on risky assets and sending them falling.

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