In the past week, Binance announced that it would remove dozens of trading pairs and merge them into one. While this could bring more volume, JPMorgan believes the decision should benefit Tether, the only stablecoin left out of this “basket”.
In the update in question, stablecoins USDC, USDP, and TUSD were converted to BUSD on the trading books. Such a move would be a way to strengthen the liquidity of various pairs, both in spot and derivatives trading.
Despite this, these three stablecoins can still be deposited and withdrawn from the exchange normally. Therefore, the change occurred only in the trades, as mentioned above.
Binance Move Benefits Tether, Says JPMorgan
Yes ok USD Coin (USDC) has closed in on Tether (USDT) in market valuewith a difference of only US$ 17 billion, its volume is still far from being a threat to its rival.
With Binance following a model that already exists on other exchanges, this reign of Tether could be further protected. According to JPMorgan’s analysis, published by The Blocksuch a change puts USDT at a huge advantage in this race.
“In our opinion, this decision will likely reinforce the importance of Tether in the stablecoin universe, which was threatened by USDC.”
Next, keep in mind that Tether’s strength is not only its market capitalization, but also its volume. Furthermore, it is worth remembering that the stablecoin has already been legally adopted by the Myanmar government.
“In our opinion, the importance of Tether is not limited only to its market share in the stablecoin universe, but also depends on its use, in particular in trading”, notes the JPMorgan analyst.
USDT volume is higher than Bitcoin
Another point that demonstrates the size of Tether well is its trading volume. According to CoinGecko, USDT has a volume of $53.7 billion in the last 24 hours, 43% higher than the volume of $37.5 billion of Bitcoin in the same period.
Meanwhile, USD Coin (USDC) and Binance USD (BUSD) hit the just $19 billion mark when their volumes are added together. Therefore, it is possible that Tether’s reign will continue for a longer time.
Given the importance of stablecoins to the market, both domestic and foreign, it is also necessary to be aware of regulations. After all, governments have a vested interest in categorizing the issuers of these currencies as banks, promising tougher laws on them, which could be a game changer.
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