The source of Tether has not increased since the start of June and here is why

The source of stablecoin Tether (USDT) hasn’t changed since the start of this month.

From June 1 to June 17, the distribution of USDT stayed at 64.25 billion USD. No expansion in USDT proves that there’s currently no need for stablecoins on the marketplace and no new money flowing in.

Tether CTO Paolo Ardoino advised The Block which USDT demand was affected by a “significant decline” in open interest on bitcoin futures lately. USDT is the “dominant stablecoin” on many crypto derivatives exchanges.

Indeed, there was a substantial drop in total bitcoin futures open interest since mid-May. From a peak above $20 billion in May, open interest has dropped to approximately 13 billion USD on June 18. Open interest is the value of unsettled derivatives contracts. Rising open curiosity means new money is flowing to the sector and vice versa.

The recent downtrend from the cryptocurrency marketplace appears to be the primary reason behind the lower open interest from the bitcoin futures market. Bitcoin has dropped from a high of $64,000 in mid-April to as low as approximately $36,000 currently.

Ardoino states that stablecoins are issued in accordance with market conditions, and because of this, their distribution fluctuates sharply.

Indeednot just USDT but the source of different stablecoins also leveled off June, as may be seen in the first chart above.

USDT has the biggest stablecoin market share, at over 60%, although its market share has declined since late last year while USDC’s market share is rising. The total source of USD-pegged stablecoins surged past the $100 billion mark for the first time . The total stablecoin distribution is now near $106 billion.

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