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Tether Inflows to Exchanges Surged to $2.7B During Recent BTC Price Drop to $90K, Analytics Firm Says
The unusually high capital inflows likely stemmed from margin calls and bargain hunting.
Feb 10, 2025, 8:23 a.m.
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.
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Coinbase Sees Crypto Recovery Ahead as Liquidity Improves and Fed Rate Cut Odds Climb
The crypto exchange also took note of a so-called AI bubble that continues to go strong and a weaker U.S. dollar.
What to know:
- Coinbase Institutional is seeing a potential December recovery in crypto, citing improving liquidity and a shift in macroeconomic conditions that could favor risk assets like bitcoin.
- The firm's optimism is driven by rising odds of Federal Reserve rate cuts, with markets pricing in a 93% chance easing next week, and improving liquidity conditions.
- Several recent institutional developments, including Vanguard's crypto ETF policy reversal and Bank of America's greenlighting of crypto allocations, have contributed to bitcoin's rebound from recent lows.
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