Tether's USDT Activity Surges 40% Amid Bitcoin's 10% Drop

Onchain activity for Tether's USDT has surged to a six-month high, with over 143,000 wallets making transfers on March 11. This spike in activity suggests that traders may be preparing to re-enter the market, potentially indicating a bullish sentiment. The increase in USDT activity coincides with Bitcoin's drop to a four-month low of $76,700 on the same day, as the broader crypto market faced macroeconomic uncertainty and escalating tariff wars.

Analysts suggest that traders often accumulate Tether during market dips to position themselves for buying opportunities. This accumulation adds buy pressure, which can help crypto prices recover. The uptick in USDT wallet activity likely reflects traders capitalizing on recent market volatility, driven by broader economic uncertainties, crypto-specific events, and Tether's role as a stable haven for investors preparing to deploy capital strategically.

Vincent Liu, chief investment officer at Kronos Research, speculates that the surge in USDT activity is a bullish indicator, suggesting significant buying power on the sidelines. However, the crypto market's recovery will likely depend on factors such as macroeconomic conditions, regulatory clarity, and investor confidence. The easing of the inflation rate to 2.8% in February and the upcoming Federal Open Market Committee meeting on March 18th may provide further indications on interest rates and monetary policy, potentially influencing market development and recovery.

Tether CEO Paolo Ardoino is currently on a tour of the US as lawmakers move to regulate the sector. During a speech at the Cantor Fitzgerald Global Technology Conference, Ardoino highlighted that around 37% of USDT users are using it as a savings account to store value. He noted that many of these users do not have traditional bank accounts and rely on USDT as their primary means of holding the US dollar in their smartphones. Ardoino also emphasized Tether's role as one of the "last strongholds for the US dollar" amid growing concerns about the currency's dominance. The stablecoin issuer has been actively working to curb bad actors in the space, collaborating on law enforcement operations and freezing illicit funds.