Tether’s dominance of the cryptocurrency market has surged, reaching its highest level since April, underscoring risk aversion in the broader crypto market.
Tether is the world’s largest dollar-denominated stablecoin, trading at a market cap of $184 billion at press time. While stablecoin is widely used to finance crypto purchases and for lending and borrowing activities, it is also a dollar equivalent in the crypto market that serves as a preferred store of value during turbulent times.
In other words, investors tend to park money in USDT and other dollar-pegged stablecoins when the market withers. And the crypto market has been under pressure lately, with market leader bitcoin losing 11% this month to $97,630.
Historically, bear markets have been characterized by sharp increases in tether dominance as traders seek to preserve capital. The onset of these bear markets often coincides with renewed bullish momentum in USDT dominance, as reflected by the MACD histogram crossover above the zero line (below left).
