Bitcoin [BTC], the largest cryptocurrency in the market, and Tether [USDT], the largest stablecoin in the market, were initially pegged on opposite ends of the spectrum.
The king coin is rightly considered to be the beacon of decentralized currency, completely detached from the fiat world, one which the cryptocurrency industry aims to eventually move away from. However, USDT, according to many, is considered to be still attached to the fiat world and is nothing but a digital representation of the US Dollar [USD].
However, despite the appearance of competition, it would seem that this is not the case as the charting of the market cap of the stablecoin and the price of Bitcoin expressed in the base USD shows almost foot-for-foot tracking.
A recent thread on Reddit revealed the same, stating that the tracking depicted Tether “pumping BTC.”
The chart shows what look like magnets, presumably indicative of USDT’s drawing force, on three occasions. Interestingly, none of the three magnetic pulls were in 2019, despite the price and market cap showing similar movements.
In late-July 2018, the top cryptocurrency in the market was trading at over $8,200 and in less than a week, the price shaved to $6,300 on the back of the crypto-winter coming in. Over the same period, the market cap of USDT dropped from $2.7 billion to $2.3 billion, which the Redditor designated as the first attraction of the cryptocurrency towards the stablecoin.
Back in August 2018, when the price of Bitcoin shot up from $6,000 to well over $7,200, USDT showed a massive upswing as well, rising from $2.3 billion to around $2.8 billion. This incline presented the case for the second magnet.
The third and final magnet was placed at the absolute rock-bottom of the crypto-winter when BTC’s price dropped to just above $3,100. In December 2018, following the advent of the BCH hardfork bears, BTC’s price dropped by over 50 percent from a month prior. Tether, going hand in hand, saw its market cap drop from $2.7 billion to $1.6 billion over the same period. However, it should be noted that the overarching market and most cryptocurrencies fell hard and fast during this period.
In 2019, the trend looked to continue as the price of Bitcoin which skyrocketed in April, also saw Tether’s market cap incline as well, presenting space for another magnetic attraction. The relationship between the two became further pronounced after the recent Bitfinex-USDT fiasco dragged BTC down to what can be attested as the first pullback in the calf-run, at the point.
Recent events point to a slight turn-off in the tracking between the two as Bitcoin’s June performance does not flow hand-in-hand with the relative BTC price and the general market’s optimistic expectations. Since the month began, Bitcoin has fallen below the $8,000 mark, dropped to $7,600 and has since, failed to break past the level, with two prominent efforts going in vain.
However, if the Bitcoin-Tether magnetic pull does bode true, the king coin will follow its stablecoin counterpart and pick up the pace soon.
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